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

Lundy (D) entered into a contract as general contractor for the construction of an addition to an elementary school. D's performance was guaranteed by a bond with Bank IV. Hope's (P) is a manufacturer of custom built windows and P contracted with D to manufacture 93 windows for the elementary school. The price was $55,000. The contract included a term relating to the time of delivery, but that was in dispute. Under P's interpretation, the windows were to be delivered in 12-14 weeks after receipt of the shop drawings (delivery no later than October 24, 1988). Production of the windows was delayed, and D threatened to withhold liquidated damages if the deadlines were not met. The windows were shipped on October 28 and delivery was anticipated on November 4. P then received a call from D and P claims that D threatened a back charge of $11,000 for late delivery of the windows. P requested assurances from D that no back charge would be assessed. D was unwilling to provide those assurances. P then suspended delivery by a letter dated November 2 until D provided assurances there would be no back charge. P then demanded prepayment from D before the windows would be delivered. D terminated the contract. P notified Bank IV and demanded payment on the work bond.

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