Bill's Coal Co., Inc. V. Board of Public Utilities of Springfield, Missouri

APPLIED BUSINESS LAW

Law 6657

Term Paper:

Bill's Coal Co., Inc. v. Board of Public Utilities of Springfield, Missouri

United States Court of Appeals for the Tenth Circuit

682 F.2d 883(1982)

Fairleigh Dickinson University

Silberman College of Business

Liuwei Wang

04/28/2015

ISSUE

Can one party’s bad faith interpretation give the other party a right to cancel the contract? Is the bad faith urging of a particular interpretation of a termination clause a breach of a contract or a repudiation?

FACTS

“The Board of Public Utilities of the City of Springfield, Missouri”, the defendant, “was and is an entity created and established under the statutes of Missouri and the Charter of the City of Springfield”. The Board started its business know as City Utilities since 1953. City Utilities is responsible for the electrical power production for the City of Springfield and is authorized to purchase supplies that are required. So it result in the Board has been given the power enter into contracts dependently.

In the calendar year 1969, the Board started to buy the coal from Bill’s Coal Company.

In 1970, “the Board sent out bid invitations to coal companies to furnish 245,000 tons of coal annually during the ten-year-period from 1971 to 1981”. Bill’s Coal’s bid was accepted and after negotiations, the Board of Public Utilities and Bill’s Coal entered into a long-term contract. “Bill’s Coal agreed to supply coal to City Utilities for ten years on a cost-plus basis.” The agreement hereafter will be referred to as the “1970 Coal Contract”.

In 1974, the parties entered into an amendment of the 1970 Coal Contract, which amendment hereafter will be referred to as the “1974 Amendment”. The purpose of the 1974 Amendment was to increase the yearly quantities of coal to be delivered to the Board of Public Utilities.

In the spring of 1976, at Seller’s request, City utilities agreed to assign the 1970 Coal Contract and the 1974 Amendment to Cherokee Coal Co. (a...