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National Dairymen Ass'n Inc. v. Dean Milk Co.

June 16, 1950

NATIONAL DAIRYMEN ASS'N, INC.
v.
DEAN MILK CO.



Author: Swaim

Before KERNER, FINNEGAN and SWAIM, Circuit Judges.

SWAIM, Circuit Judge.

The principal question presented on this appeal is whether a series of written communications between the parties resulted in the formation of a contract and an anticipatory breach thereof by the defendant. The District Court concluded that a valid contract had been entered into; that since no time for performance had been specified, performance was to be within a reasonable time; and that a reasonable time had not yet elapsed when the defendant, Dean Milk Company, breached the contract by repudiating the contract and by refusing to be bound. Judgment was entered for the plaintiff, National Dairymen Association, in the amount of $83,918.20.

The transaction between the parties was started on May 16, 1946, when the defendant sent the following letter to the plaintiff.

"We are very much interested in helping to feed the nations of Europe who are in dire need of foodstuffs. We offer you 60,000 cases Evaporated Milk for reasonably prompt shipment after confirmed letter of credit has been opened, for $4.55 per case, F.O.B. Factory, net cash, packed in export double strapped solid fibre cases.

"This offer is subject to the government's acceptance for export and if a permit is issued for us to ship on above basis, we will try to get you additional quantities at that time. These additional quantities will possibly be well in excess of the above amount on which we are giving you a firm offer today.

"This tender is made with the understanding we are to have a firm reply within two weeks from this date.

"This is all fresh packed milk guaranteed United States government standard in every respect."

The plaintiff's first communication in reply was a letter dated May 25, 1946, as follows:

"I am trying to have a few export licenses cleared together with fair rate of exchange so that we can ship some milk abroad; will be in further touch with you.

"Mr. Dean thought you might like to figure on supplying us with substantial volume - we to supply containers - of this product; 9% butterfat 31% solids. I should like to have your early reply."

Two days later, May 27, 1946, the plaintiff sent to the defendant the following telegram: "This replies to your offer May 16 and to advise that we accept this offer of sixty thousand evaporated milk. Please advise delivery schedule."

Following the receipt of the above telegram, defendant wired plaintiff May 28, 1946, as follows: "Can ship 30,000 or 40,000 cases promptly Stop Must have letter credit apply against railroad bills of lading also export permit license before loading Stop This will need your immediate attention Stop ...


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