Eastern Airlines, Inc. v. Mcdonnell Douglas Corp.,

532 F.2d 957 (5th Cir. 1976)

Facts

Eastern (P) contracted with McDonnell (D) to purchase jets. The contract took into account the Defense Production Act; the government could issue orders to manufacturers to give priority to military production. Instead of invoking the DPA provisions, the government made offers to manufacturers they just couldn't refuse; to give the U.S. priority or formal directives would be issued. Deliveries to P were delayed because of this back-door arm-twisting. P sued to obtain damages from D for the late deliveries. The trial court awarded P damages. The trial court found in part that the notice requirement under 2-607 was inapplicable to delivery delays of the type experienced herein because a seller necessarily had notice of such a contract violation. The court held that 2-607 was to inform the seller of hidden defects in his performance. D appealed.