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Keywords

contractbreach of contractdamages
contractbreach of contractdamages

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Spang Indus., Inc., Ft. Pitt Bridge Div. v. Aetna Casualty & Surety Co., 512 F.2d 365

Facts

Torrington Construction Co., Inc. was awarded a contract for highway reconstruction and relied on Spang Industries, Inc. for the delivery of structural steel. After several delays in delivery, which caused additional costs for Torrington, the subcontractor Spang Industries counterclaimed for the balance due on the subcontract. The cases were consolidated in the federal district court, which found that Spang Industries breached the contract by failing to deliver the steel on time, resulting in damages to Torrington.

Torrington Construction Co., Inc. was awarded a contract for highway reconstruction and relied on Spang Industries, Inc. for the delivery of structural steel. After several delays in delivery, which caused additional costs for Torrington, the subcontractor Spang Industries counterclaimed for the balance due on the subcontract. The cases were consolidated in the federal district court, which found that Spang Industries breached the contract by failing to deliver the steel on time, resulting in damages to Torrington.

Issue

Did the subcontractor's delays in delivering steel constitute a breach of contract, and were the damages claimed by the contractor recoverable under the principles established in Hadley v. Baxendale?

Did the subcontractor's delays in delivering steel constitute a breach of contract, and were the damages claimed by the contractor recoverable under the principles established in Hadley v. Baxendale?

Rule

Under the rule of Hadley v. Baxendale, damages for breach of contract should be those that may reasonably be considered to arise naturally from the breach or those that were in the contemplation of both parties at the time the contract was made.

Under the rule of Hadley v. Baxendale, damages for breach of contract should be those that may reasonably be considered to arise naturally from the breach or those that were in the contemplation of both parties at the time the contract was made.

Analysis

The court found that the delays in delivery by Spang Industries were not excusable and that Torrington's incurred expenses were a direct result of the breach. The court reasoned that the damages claimed were foreseeable and that the subcontractor should have anticipated the consequences of its failure to deliver the steel on time, especially given the specific timeline communicated by Torrington.

The court found that the delays in delivery by Spang Industries were not excusable and that Torrington's incurred expenses were a direct result of the breach. The court reasoned that the damages claimed were foreseeable and that the subcontractor should have anticipated the consequences of its failure to deliver the steel on time, especially given the specific timeline communicated by Torrington.

Conclusion

The court affirmed the award of damages to Torrington for the breach of contract while reversing the denial of interest on the unpaid subcontract obligations, concluding that the right to interest was not waived.

The court affirmed the award of damages to Torrington for the breach of contract while reversing the denial of interest on the unpaid subcontract obligations, concluding that the right to interest was not waived.

Who won?

Torrington Construction Co., Inc. prevailed in part, as the court recognized its right to recover damages due to the subcontractor's breach of contract.

Torrington Construction Co., Inc. prevailed in part, as the court recognized its right to recover damages due to the subcontractor's breach of contract.

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