Casey IRACs are produced by an AI that analyzes the opinion’s content to construct its analysis. While we strive for accuracy, the output may not be flawless. For a complete and precise understanding, please refer to the linked opinions above.

Keywords

contractsettlementlitigationprecedentmotioncorporationcondition precedentmotion to dismiss

contractplaintiffdefendantcorporation

Related Cases

Sable Corp. v. Dual Office Suppliers, Inc., Not Reported in F.Supp., 1987 WL 6315

Facts

In January 1981, Sable Corporation, through its predecessor, entered into a contract with the City of Chicago to provide coin-operated photocopy services to the Chicago Public Library. The City purportedly terminated this contract in May 1983 and awarded a new contract to Dual Office Suppliers. Following this, litigation arose between Sable and the City, and between Dual and the City, leading to a settlement agreement that outlined the rights and obligations of both parties regarding the contract for photocopy services.

Plaintiff, Sable Corporation (“Sable”), by its predecessor in interest, Vend-A-Copy, Inc., contracted in January, 1981 with the City of Chicago for the provision of coin-operated photocopy vending services to the Chicago Public Library (“CPL”). That contract was purportedly terminated by the City in May, 1983. In July of 1983, the City purported to award a contract for coin-operated photocopy vending services for the CPL to the defendant, Dual Office Suppliers, Inc. (“Dual”).

Issue

Did Sable breach the agreement with Dual by failing to respond to a request for adequate assurances of performance?

Rule

Under the Uniform Commercial Code, a party may demand adequate assurances of performance when reasonable grounds for insecurity arise, but this applies only to transactions involving the sale of goods.

Under § 2–609 of the Uniform Commercial Code, a party to a contract for sale may demand adequate assurances of performance from the other party when reasonable grounds for insecurity arise with respect to his performance.

Analysis

The court found that Sable had no obligation to perform at the time Dual requested assurances, as the condition precedent for Sable's performance had not occurred. The court also noted that the agreement did not impose a duty on Sable to substitute for Dual, but rather granted Sable the option to do so. Since the agreement did not involve the sale of goods, Dual had no right to demand adequate assurances under the UCC.

Sable contends, and the Court agrees, that Dual's counterclaim fails to state a cause of action for two reasons: (1) no performance from Sable is alleged to have been owing at the time the request for assurances was made; (2) the Agreement does not involve the sale of goods and thus Dual does not have a right under the Uniform Commercial Code to receive adequate assurances of performance.

Conclusion

The court granted Sable's motion to dismiss Dual's counterclaim, concluding that it failed to state a claim for breach or repudiation of the agreement.

Accordingly, Dual's counterclaim must be dismissed for failure to state a claim.

Who won?

Sable Corporation prevailed in the case because the court found that Dual's counterclaim did not state a valid cause of action under the terms of the agreement and applicable law.

You must be

Log In to Casey

Sign Up to Casey

Reset Your Password

Keywords

Related Cases

Union of India v. Union Carbide Corp., 484 U.S. 871, 108 S.Ct. 199, 98 L.Ed.2d 150

McDermott Inc. v. Lewis, 531 A.2d 206, 56 USLW 2179

Belkin v. Islamic Republic of Iran, 667 F.Supp.2d 8

Espinoza v. Montana Dept. of Revenue, 139 S.Ct. 2777 (Mem), 204 L.Ed.2d 1157, 19 Cal. Daily Op. Serv. 6218

Crowell v. Benson, 285 U.S. 22, 52 S.Ct. 285, 76 L.Ed. 598, 1932 A.M.C. 355