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Keywords

contracttrialmotioncontractual obligationbench trial

contractplaintiffdefendantdamagesappealtrialcontractual obligationappellantappelleebench trial

Related Cases

Barrington Group, Ltd., Inc. v. Classic Cruise Holdings S De RL, 435 Fed.Appx. 382

Facts

The Barrington Group, a seller of promotional items, entered into contracts with Classic Cruise Holdings, which later cancelled two orders due to pricing issues. Despite the cancellation, Barrington proceeded to manufacture the goods, citing time constraints and contractual obligations to third parties. After a bench trial, the district court found that Barrington acted reasonably and awarded them the full contract price plus interest.

Barrington is a Dallas-based company selling custom leather goods that are embroidered, engraved, or embossed with the customer's company logo for the corporate gift market. Classic Cruise accepted three invoices and paid Barrington in full upon delivery, but on September 26, 2008, Classic Cruise, via e-mail, informed Barrington that it would be cancelling two orders, Invoice Nos. 80107 and 80109, set for delivery in December.

Issue

Did the district court correctly conclude that Barrington acted in a commercially reasonable manner when it continued to manufacture goods after Classic Cruise cancelled the orders?

At issue in this appeal is whether the district court correctly concluded that Plaintiff–Appellee The Barrington Group, Limited, Inc. (Barrington) acted in a commercially reasonable manner, as required by the Uniform Commercial Code (U.C.C.), when it decided to continue the manufacture of goods ordered, and subsequently cancelled, by Defendant–Appellant Classic Cruise Holdings (Classic Cruise).

Rule

Under the U.C.C., a seller may complete the manufacture of goods and sue for the price if it exercises reasonable commercial judgment to avoid loss.

Section 2–704(b) of the U.C.C., adopted as Tex. Bus. & Com.Code Ann. § 2.704, determines the appropriate damages calculation for incomplete goods.

Analysis

The court found that Barrington's decision to continue manufacturing was reasonable given the compressed timeline for delivery, existing contractual obligations, and the specially manufactured nature of the goods. The court also noted that Barrington was not required to breach contracts with third parties to meet the standard for commercially reasonable behavior.

Here, after a bench trial, the district court held that, based on its factual findings, Barrington acted in a commercially reasonable manner when it decided to complete manufacture of goods ordered by Classic Cruise.

Conclusion

The court affirmed the district court's ruling, concluding that Barrington acted in a commercially reasonable manner and was entitled to the full contract price.

The district court also held that 'Barrington was not required to breach its contracts with third parties to meet the standard for commercially reasonable behavior in this case.'

Who won?

The Barrington Group prevailed in the case because the court found that they acted reasonably in continuing to manufacture the goods despite the cancellation.

The district court identified a number of reasons supporting its holding that Barrington acted in a commercially reasonable manner. The district court noted that 'the evidence showed a compressed time-line for delivery; that Barrington had contractual obligations to various manufacturers; that the goods were specially manufactured and have no standard market or resale value; and that the goods would be of little or no value after the cruise ships sailed.'

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