Notes - Schlegel Manufacturing Co. v. Cooper’s Glue Factory

NOTE

1. In the five years preceding the contract in litigation, plaintiff's orders had never exceeded 35,000 pounds per year. During the 1916 contract period, plaintiff ordered about 170,000 and received 65,000 pounds. Plain tiff tried to fill his 1917 requirement and defendant never repudiated the orders; in fact, defendant's representative promised repeatedly as late as December 1916 that he would ship. 189 A.D. 843, at 846, 179 N.Y.S. If 273, at 280. Does the decision amount to saying that jobber's requirement contracts are unenforceable? In the Appellate Division decision, Page. J., in his dissenting opinion had this to say: "The facts in this case show conclusively in my opinion that the plaintiff was not acting in good faith but was using the contract speculatively and not as contemplated by the parties." 189 A.D. 849, 855. Was the promise of defendant's representative not binding?

Why was not the defendant's promise a continuing offer which in turn was accepted?

2. The defendant, a wholesale ice company, agreed to sell to plaintiff coal company 100 tons of ice at a stated price, and plaintiff agreed to purchase all the ice used by it up to 100 tons. Payments were to be made daily and the agreement was to continue for one year. Unknown to defendant, plaintiff at the time of the agreement was not in the ice business and had no use for ice. Two months after the contract was entered into, plaintiff made its first demand for ice to be delivered to a former customer of defendant, who had bought ice until his supply was stopped for failure of payment. Upon defendant's refusal to deliver, plaintiff sued for damages. Held, for defendant. Plaintiff 

impliedly represented that it was either in the ice business or would be in the ice business with a market for ice in Mayor June and would require ice daily not to exceed one hundred (100) tons. It was in no such business and made no bona fide demand for any ice under this contract. In other words, it had no need for ice.

Nassau Supply Company, Inc. v. Ice Service Co., 252 N.Y. 277, 169 N. E. 383 (1929), discussed in 43 Harv. L. Rev. 828 (1930). Comment 2 to U.C.C. §2-306, reprinted supra pp. 433-434, requires careful reading.