Case Briefing rewriting Homework Assignment

Case Briefing rewriting Homework Assignment

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Briefing the Case
Chapter 12
Case: LNS INVESTMENT COMPANY, INC., v. PHILLIPS 66 COMPANY.
Citation: LNS Inv. Co. v. Phillips 66 Co., 731 F. Supp. 1484 (D. Kan. 1990)
Court of Decision: United States District Court, D. Kansas.
Date Decided: February 23rd, 1990
Parties: Plaintiff LNS INVESTMENT CO., INC. Defendant PHILLIPS 66 CO.

Facts: Plaintiff LNS Investment Co. Inc was the successor to CBC, a company that blended,
labeled, and packaged quart bottles of motor oil including for Phillips 66 Co. In July of 1986
Phillips sent a letter to LNS confirming a verbal agreement that LNS would provide to Phillips
66 up to 4 million quarts of oil by December 31st, 1986 and that additional equipment would be
needed for the production. Despite the agreement, LNS had marked difficulty with production
and Phillips 66 repeatedly was unsatisfied with the quality of the oil quarts produced. Letters of
dissatisfaction and reason were exchanged and Phillips 66 Co made LNS aware they would not
be renewing any agreements due to the poor quality of production. LNS filed suit against Phillips
66 CO for not purchasing the full output of production through December 31st, 1986 citing the
July 1986 agreement.

Issue Statement: Did the Plaintiff breach the contract by failing to produce the quantity and
quality required within the contract?

Rule of Law or Legal Principle Applied: Kan. Stat. Ann. § 84-2-201 (West) Kan. Stat. Ann. §
84-2-208 (West) Kan. Stat. Ann. § 84-2-209 (West) Kan. Stat. Ann. § 84-2-609 (West)

Analysis: The court found that the contract was subject to the statute of frauds as provided in
Kan. Stat. Ann. § 84-2-201 because it involved the sale of goods priced above $500.00 or more.
The court found that the defendant did not waive the contractual requirements that plaintiff’s
production be on an even and weekly basis pursuant to Kan. Stat. Ann. § 84-2-208 (West) and
Kan. Stat. Ann. § 84-2-209 (West). The court also found that according to Section 84–2–609,
“Plaintiff’s failure to provide either the quantity or quality of goods contemplated by the July 29
agreement entitled defendant to suspend its performance.” LNS Inv. Co. v. Phillips 66 Co., 731
F. Supp. 1484, 1487 (D. Kan. 1990). Finally, the court found “circumstances were sufficient to establish defendant’s right to adequate assurance of plaintiff’s future performance under K.S.A.
84–2–609” and that the plaintiff failed to provide adequate assurance.

Conclusion: Judgment was entered in favor of defendant on plaintiff’s breach of contract claim
and plaintiff’s motions to strike was denied.

LNS Investment Company Inc v. Phillips 66 Company
731 F. SUPP. 1484 (D. KAN. 1990)
United States District Court for the District of Kansas
Facts
A) In 1986, an agreement was reached between Phillips and CompuBlend
Corporation where Phillips would purchase an increased amount of motor oil
so that CompuBlend could in turn create more.
B) There were many issues within production and quality-control to where
Phillips was left unsatisfied with the product they received.
C)A letter was sent to notify CompuBlend of the dissatisfaction with their
product and they responded with a dedication to improvement.
D) Quality did not improve and Phillips decidedly suspended their contractual
obligations with CompuBlend Corporation on account of performance insufcient to the standard necessitated by the contract.
Issues
Was the contract satisfied and concluded upon inferior performance by CompuBlend Corporation?
Rule
Section 84-2-609 of the UCC Code for right to adequate assurance of performance and UCC Comment 4.
Analysis
The court held that:
A) Adequate assurance was protected both by law and by the contract between the parties.
B) The issues were neither remedied nor resolved as had been promised by
CompuBlend Corporation representatives.
C) Consistent inadequacy and failed to perform deemed the contract finished.
Conclusions
The court held that Phillips did not breach contract; it was instead CompuBlend who had breached the contract.
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