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This section contains the nature of the case and procedural background.

Helm (D), an international trading company based in Germany, decided to purchase a large amount of polystyrene from Cosden Oil & Chemical Company (P), a Texas-based producer of chemical products. P and D agreed to the purchase and sale of 1250 metric tons of high impact polystyrene at $.2825 per pound and 250 metric tons of general purpose polystyrene at $.265 per pound. Purchase confirmation 04 contained the terms for high impact, and 05 contained the terms for general purpose. Confirmation 04 specified that D had an option for an additional 1000 metric tons of high impact, and confirmation 05 expressed a similar option for 500 metric tons of general purpose. The first shipment of high impact under order 04, was to be delivered FAS at a New Jersey port to make a January 29 shipping date for a trans-Atlantic voyage. On January 23, D also declared the options on purchase orders 04 and 05, designating the high-impact option quantity as order 06 and the general purpose option quantity as order 07. D sent purchase confirmations 06 and 07, which P received on January 29. After shipping 90,000 pounds of the product, P informed D that delivery under the 04 contract might be delayed. A few days later, P informed D that it was canceling orders 05, 06, and 07 because it did not have enough product to fill the orders. Although P shipped over a million more pounds under 04, it was forced to cancel the remainder of 04 because it did not have enough product. P remained unpaid for the polystyrene that had been delivered. P sued, and the jury found that P had anticipatorily repudiated orders 05, 06, and 07 and that P's cancellation of order 04 before D's failure to pay for the second 04 delivery constituted a repudiation. The district court determined that D was entitled to damages of the difference between the contract price and the market price at a commercially reasonable time after P repudiated its delivery obligations and that P was entitled to an offset. P claimed that damages should be measured when D learned of the repudiation. D claimed that the market price at the time of performance should be used to compute damages. The district court awarded D $628,676 and P a $355,950 offset for unpaid deliveries. Both parties appealed.

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Legal analysis from Dean's Law Dictionary will be displayed here.