Other
Feld v. Henry S. Levy & Sons, Inc., 410 N.Y.S.2d 647 (N.Y. App. Div. 1978)
Study notes for Feld v. Henry S. Levy & Sons, Inc.: professor notes, cold call prep, exam angles, and memory aids.
In a requirements contract, a supplier's failure to perform consistently justifies a buyer's decision to seek alternatives without breaching the contract.
This case emphasizes the significance of the implied covenant of good faith and fair dealing in contracts. The court found that Levy's failure to deliver consistent quality and fulfill its obligations impacted Feld's ability to perform under the contract. Professors might highlight the balance between contractual freedom and the necessity for parties to uphold their good faith obligations to ensure fair dealings within contracts. Furthermore, the ruling here stresses that a contracting party's inability to meet their obligations can justify another party's decision to pursue alternative suppliers or options. The decision underscores that parties are not merely to abide by the letter of agreement but are to engage in fair dealings as well, contributing to the broader context of contract law where trust and reliability in business relationships are paramount.
Good faith binds the trade; bad faith leads to dismay.
| Case | Distinction |
|---|---|
| UCC § 2-306 – Output and Requirements Contracts | Unlike Feld, UCC provisions set clearer expectations and standards for quantity in requirements contracts, emphasizing a good faith obligation but allowing for reasonable variations. |
| Cleveland v. Bedford | Cleveland involved a clear breach of contract by not fulfilling a minimum quantity, while Feld's breach was framed around a lack of good faith by the supplier. |
| Wood v. Lucy, Lady Duff-Gordon | Wood focused on exclusivity and the implied good faith in the marketing effort, while Feld's case revolves around the execution of the delivery of goods and the failure of the supplier. |
Enforcing good faith obligations ensures that parties act honestly, preserving trust in contractual relationships and promoting fair commerce.
Strict enforcement of good faith could deter parties from entering into flexible agreements if they fear unpredictable additional liabilities.
This case may appear on exams as a discussion on the good faith obligation in contracts, particularly in requirements contracts and the implications of one party's failure to honor those obligations.