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GTH in the News: New York Law Journel Case of the Day; Thursday, May 9, 2002 In Brief: Decisions of Interest 5/9/2002 NYLJ (page 17, col. 2; page 27, col. 1-6)
Engineering News - Record; Legal;
July 15, 2002 (page 18)
Out-of-Spec Chain Had to Meet All Criteria
Contracts:
Testing protocol Did
Not Override Contract
Requirements or Assurances.
Seabury v. Jeffrey Chain Co.
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Kalvin Kamien of Greenberg, Trager, & Herbst, LLP. New York, NY, for Plaintiff-Appellant Seabury.
In April 1995, the DEP entered into a $7,710,000 contract with Seabury to reconstruct
twenty-seven water treatment tanks located at the Hunts Point Plant, in New York City. The tanks
in question facilitate wastewater treatment by allowing the water to settle, at which point it is skimmed to remove
waste product. The skimming equipment consists of collector and drive chains, which resemble
large bicycle chains, assembled into arrays that were continually passed through the tanks to
remove solid waste materials. In order for chain to survive in the highly corrosive wastewater
environment, it must be manufactured to precise contract specifications, including those related
to the hardness of the links. Seabury sued Jeffrey Chain Corporation, claiming
breach of contract arising from failures in the industrial collector chain.
Following a bench trial, the District Court found that the chain failed because links had been manufactured to hardness levels that exceeded contract specifications but that a provision in the City contract precluded recovery on the part of Seabury.
Jeffrey had argued that only one provision of the contract should be followed, while Seabury argued that well-established principles of contract interpretation require that all provisions of a contract be read together as a harmonious whole. The UNITED STATES COURT OF APPEALS for the Second Circuit reversed the District Court, and remanded with instructions to enter judgment in favor of Seabury and to determine appropriate damages.