Appeal Court Decision 3

 Appeal Court Decision

Appellant paving company sought review of a decision of the Superior Court of Alameda County (California), which sustained defendant materials supplier's demurrer and entered judgment for the supplier.

 

Overview: coporate lawyers

 

The paving company had a contract with the city to pave its streets with its patented process. The city entered into a contract with the supplier for paving its streets and the paving company entered into a contract with the supplier whereby the supplier agreed to furnish the supplies and labor for the paving work. The city abandoned the project and paid the supplier in full settlement for all work completed. The paving company filed a breach of contract complaint against the supplier. The court affirmed the judgment in favor of the supplier because an action for breach of contract did not lie when its performance was prevented by operation of law. The court concluded that the abandonment proceedings were initiated by the city and the only "agreement" made by the supplier was to release the city from all claims. The release of claims that might accrue was merely a precautionary measure on the city's part. The sum paid to the supplier had previously been determined as the "fair and reasonable value" of the completed units. Hence the court held that the complaint clearly disclosed in both causes of action a prevention of performance which fully excused the supplier.

 

Outcome

The court affirmed the judgment in favor of the supplier.