Pittsburgh-Des Moines Steel Co. v. Brookhaven Manor Water Co.

532 F.2d 572 (7th Cir. 1976).

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Nature of the Case

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Facts

P submitted a proposal to D for the construction of a one-million-gallon water tank for $175,000. The original proposal incorporated, as terms of payment, 60 percent upon receipt of materials in P's plant, 30 percent upon completion of erection, and 10 percent upon completion of testing, or within 30 days after the tank had been made ready for testing. These terms were not acceptable to D. D altered the payment to 100% of the contract price was due and payable within 30 days after the tank had been tested and accepted. The altered proposal was signed and accepted by D on November 26, 1968. During negotiations, D’s credit was not an issue. After D's acceptance, P heard something about a loan that D was negotiating for. The credit manager for P wrote the prospective lender, copy to D, requesting that $175,000.00 for payment of the project will be held in escrow and fully committed to payment to P upon completion of referenced elevated tank. P then informed D that the order was in abeyance until receipt of such notification. D did not respond. When the loan did not go through, P's credit manager wrote D's president asking for his personal guarantee of payment. P also demanded an escrow account be set up. The president sent a statement of his personal worth. P did not go through with building the tank. P sued for repudiation. D counterclaimed alleging that P was in breach. The jury found for P; a judgment n.o.v. was entered for D by the trial court. P appealed.