Summary of Laredo Hides Co., Inc. v. H & H Meat Products Co., Inc.
Court of Civil Appeals of Texas, 1974 513 S.W. 2d 210
Facts: (P) a hide company is appealing after (D) a meat company won a take nothing judgement. A written contract was signed by the two companies which promised that (D) would deliver its entire hide production within a specified period of time to (P). At a point in time during the time of the contract, (D) failed to receive payment from (P) due to a mail delay of some sort. (D) immediately ceased to fulfill the rest of the contract. Due to this lack of fulfillment by (D), (P) had to purchase hides at a significantly higher market rate, in order to satisfy its contract with a Mexican tannery. While (P) demonstrated its monetary damages, (D) did not refute them.
Rule: The actions of (D) were unjustified. Its refusal to deliver the amount of hides specified in the contract was in itself a breach by repudiation.
Issue: Is (D) required to pay (P) for the damages incurred as a result of the market change in price?
Holding: Yes. According to statute 2.712 of the Texas Business and Commerce Code, if the purchaser made good faith without reasonable delay, he may recover from the seller the difference between cost and cover.
Reasons & Policies: (P) offered evidence of the total amount of damages, of which (D) did not refute. According to statute 2.712 of the Texas Business and Commerce Code, if there was good faith without delay, the purchaser may recover damages. The court ruled that the actions of (D) were unjustified and following the statute, this entitled (P) to the difference between cost and cover.