United States v. Wegematic

• In June 1956, the Federal Reserve Board invited several electronics manufacturers to design computer systems.
• Wegematic Corp. = "Wegematic" = defendant = an electronic manufacturer which proposed building a new computer for delivery in 9 months
• The 2 parties signed a contract for delivery of the computer on June 30th 1957
• Liquidated damages for late delivery were set at $100/day
• Wegematic delayed the delivery to October 1957
• In August 1957, Wegematic announced that the delivery wouldn't occur until 1959
• In October 1957, Wegematic announced that the production of the computer would be impracticable; thus, the order would be cancelled
• The Board immediately rented a computer from IBM at great expense

• The Board sued Wegematic.
• Wegematic lost in the federal district court.
• The Board won over $235,000 in damages.

Can a manufacturer who promises a revolutionary new product claim impracticability as a defense to failure to produce that product on time?

• Wegematic argued that engineering difficulty would have required over $1,000,000 to surmount in order to build the promised computer for the Board.
• Wegematic argued that its performance was excused by practical impossibility (impracticability).

No. A manufacturer who promises a product can't claim impracticability if engineering problems make production more difficult or expensive than anticipated.

Affirmed