United States v. Wegematic
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United States v. Wegematic | |
Court | 2nd Circuit |
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Citation | 360 F.2d 674 |
Date decided | May 5, 1966 |
Facts
- 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
Procedural History
- The Board sued Wegematic.
- Wegematic lost in the federal district court.
- The Board won over $235,000 in damages.
Issues
Can a manufacturer who promises a revolutionary new product claim impracticability as a defense to failure to produce that product on time?
Arguments
- 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).
Holding
No. A manufacturer who promises a product can't claim impracticability if engineering problems make production more difficult or expensive than anticipated.
Judgment
Affirmed
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