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Keywords

contractbreach of contractdamagestrialliquidated damages
contractdamagestrialwillliquidated damages

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USEMCO, Inc. v. Marbro Co., Inc., 60 Md.App. 351, 483 A.2d 88, 39 UCC Rep.Serv. 1600

Facts

USEMCO, a manufacturer of pumping stations, submitted a proposal to Marbro for an automatic pumping station to be used in a sewage treatment facility for Anne Arundel County. Marbro placed an order contingent upon county approval, and USEMCO later sent an Order Acknowledgment with Standard Terms and Conditions. The county required completion by October 10, 1977, but due to delays in delivery of the pumping stations, the project was not completed until June 21, 1978, resulting in Marbro being assessed $31,500 in liquidated damages.

USEMCO is a manufacturer of pumping stations. Through its Maryland agent, Flow Industries, Inc. (Flow), USEMCO learned that Anne Arundel County was soliciting bids for the construction of sewage systems.

Issue

Did the trial court err in its findings regarding the contract terms, breach of contract, and the assessment of damages based on liquidated damages?

Did the lower court err in not accepting as controlling the Standard Terms and Conditions as part and parcel of this contract?

Rule

The court applied the principles of the Uniform Commercial Code (UCC), particularly UCC § 2-207, which governs the acceptance of offers and the inclusion of additional terms in contracts between merchants.

An essential feature of every contract being the mutual assent of the parties, it is usually necessary for one of them to 'propose to the other a promise which he will make for a certain consideration, or to state the consideration which he will give for a certain promise.'

Analysis

The court determined that USEMCO's initial proposal was not an offer but merely an invitation to negotiate, and thus the Standard Terms and Conditions did not become part of the contract. The court found that USEMCO was aware of Marbro's deadline and the potential for liquidated damages, and that its delay in delivering the pumping stations constituted a breach of contract.

The trial court found that USEMCO had breached its agreement with Marbro by failing to make timely delivery of the pumping station, thereby causing Marbro's failure to complete the project within the time allowed by its contract.

Conclusion

The court affirmed the judgment in favor of Marbro, allowing a setoff for liquidated damages and leaving a balance of $1,750 due to USEMCO.

Judgment was therefore entered in that amount.

Who won?

Marbro Company, Inc. prevailed because the court found that USEMCO breached the contract by failing to deliver the pumping station on time, which caused Marbro to incur liquidated damages.

Marbro Company, Inc. prevailed because the court found that USEMCO breached the contract by failing to deliver the pumping station on time, which caused Marbro to incur liquidated damages.

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