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REACTION MOLDING TECHS. v. GE

July 18, 1984

REACTION MOLDING TECHNOLOGIES, INC., t/a Rim/Precision
v.
GENERAL ELECTRIC COMPANY



The opinion of the court was delivered by: LORD

 On April 26, 1984, 585 F. Supp. 1097, I wrote an extensive opinion denying plaintiff's and defendant's motions for partial summary judgment and setting forth the law to be applied at trial. *fn1" I have tried the case without a jury. The following constitute my findings of fact and conclusions of law.

 Plaintiff, a Pennsylvania corporation with its principal place of business in Pennsylvania, produces plastic parts by means of a process known as reaction injection molding. Reaction Molding Technologies (Rim) produces the parts from molds. Rim subcontracts to various subcontractors the construction of the molds used by Rim to produce its plastic parts.

 Defendant is a New York corporation with its principal place of business in New York. I have diversity jurisdiction.

 Count I of the complaint alleges that plaintiff and defendant entered into a contract in 1982 for the construction of four molds from which plaintiff would produce plastic parts for defendant to use in the construction of a medical equipment system, the CT 9800. This Count further alleges that defendant breached the agreement by unilaterally terminating the contract.

 The parties agree that a contract existed between them. The only questions at trial as to Count I were the delivery dates of the contract and whether defendant unilaterally breached the agreement.

 I. Count I: Facts

 Throughout 1981, GE requested that Rim prepare numerous quotations for the production of four molds from which parts were to be constructed for defendant. The four molds in question were to produce the covers for the right and left hand support arms, the small desk and the keyboard housing for the CT 9800. In response to the GE requests, Rim prepared various quotations in 1981 for production of the molds. Because of design changes at GE, however, GE never submitted a purchase order in 1981.

 In February of 1982, GE sent to Rim another request for quotations. Rim prepared its quotations (Rim 1b-1e) which were received by GE on March 2 or March 3, 1982. On the bottom of the first page of all four quotations were the following terms:

 
One-third with order; one-third upon notification of mold completion; one-third upon approval of preproduction samples.

 As to delivery of the covers for the right and left hand support arms, the quotations stated:

 
Delivery: Moldmaker's delivery approximately twenty-two weeks; pre-production samples to follow.

 For the small desk and keyboard housing molds, the delivery terms were identical to those in the quotations for the cover parts with the exception that the approximate number of weeks quoted was sixteen and twenty weeks respectively. Cletus Roshak, the buyer for GE on this project, received the Rim quotations and understood that "one-third with order" meant that Rim wanted a one-third deposit. He also understood that Rim was going to subcontract the construction of the molds and that the word "approximately" in the delivery terms meant that the number of weeks quoted for delivery was not precise. On March 3, 1982, GE prepared a material requisition form (Rim 8) in order to obtain approval from the necessary principals at GE for a purchase order. Although the form could have been rushed through the approval process in a week, it was not completed until March 22, 1982.

 On March 22, 1982, Cletus Roshak, then recently hired buyer for GE, called David Michaelis, vice president of Rim, to tell him that GE was ready to submit purchase orders to Rim for the molds. Roshak told Michaelis that he could not give Rim a one-third deposit with the order because the GE system demanded an invoice before a check could be issued, but he promised that he would rush the check. Michaelis told Roshak that normally moldmakers would not begin work before receiving a deposit, and that he would not do anything until he saw the purchase orders. Because Roshak believed that GE could not process the purchase orders with an approximate number of weeks for delivery, but that a specific date was needed to put into the computer, he told Michaelis that he needed a date to put on the purchase orders. Roshak counted ...


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