Austin Instrument, Inc. v. Loral CorporationCt of App. NY (1971P.343J. FuldFACTS:Loral Corp. was awarded a Naval contract to produce 40 parts required to manufacture radar sets. The contract had a delivery schedule that imposed penalties for late deliveries. Loral subcontracted the manufacturing of 23 of the parts to Austin Instrument, Inc. Austin began production and complied with the delivery schedule. Navy then awarded Loral Corp. another contract for the 40 parts. Loral informed Austin that they would only get the subcontract for the parts on which they were the lowest bidder. Austin informed Loral that they would cease performance of the existing contract unless Loral gave them the bid for all 40 of the parts in the new contract, and agreed to pay an increased price on the parts under the current contract, including those that it had already delivered.Loral could not find another producer that could meet the deadline requirements it had with Navy and submitted to Austin’s terms. After production was completed, Loral sued for $22,250 which was the total
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