Simcala, Inc. v. American Coal Trade Inc.

821 So.2d 197 (2001)

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Nature of the Case

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Facts

D issued a purchase order that estimated it would purchase from P 17,500 tons of 'Black Creek' coal at $ 78.50 per ton in 1998. The purchase order stated that the order was a blanket order for 1998 and that 'the above [i.e. 17,500 tons] is an approximate quantity and to be shipped as required.' D also included in the purchase order chemical and size specifications for the coal. D purchased only 7,200 tons of coal. D suspended its orders in mid-May because of problems with its furnace and it purchased no coal from D from mid-May to the end of June. D claims that the furnace problems were caused by the poor quality of the coal, but it does not argue that the coal failed to meet the specifications in the purchase order. D resumed orders for coal at the end of June. P's mine from which it obtained the coal to fulfill D's purchase order closed in August 1998. Throughout September, P's supplier had a surplus of coal from that mine and P had asked D to purchase some of this surplus coal. D ordered no coal in September. In early October D ordered 600 tons of coal but P did not deliver because by October its supplier had sold the surplus coal from the closed mine to another buyer. P offered uncontroverted evidence that by mid-October it would have had another source had D ordered any additional coal. The court found that D's purchase of only 41% of its estimated needs for the year was 'unreasonably disproportionate' under 2-306(1) and that D had breached the contract. The court awarded P lost profits of $101,850, interest in the amount of $ 10,690, and taxed costs to D. P appealed.