Ethics Case Both Allsopp Sand and Gravel (Allsopp) and Lincoln Sand and Gravel (

Question

Ethics Case Both Allsopp Sand and Gravel (Allsopp) and Lincoln Sand and Gravel (Lincoln) were in the business of supplying sand to construction companies. In March, Lincoln's sand dredge became inoperable. To continue in business, Lincoln negotiated a contract with Allsopp to purchase sand over the course of a year. The contract called for the sand to be loaded on Lincoln's trucks during Allsopp's regular operating season (March through November). Loading at other times was to be done by "special arrangement." By the following November, Lincoln had taken delivery of one-quarter of the sand it had contracted for. At that point, Lincoln requested that several trucks of sand be loaded in December. Allsopp informed Lincoln that it would have to pay extra for this special arrangement. Lincoln refused to pay extra, pointing out that the sand was already stockpiled at Allsopp's facilities. Allsopp also offered to supply an employee to supervise the loading. Negotiations between the parties broke down, and Lincoln informed Allsopp that it did not intend to honor the remainder of the contract. Allsopp sued Lincoln. Is it commercially reasonable for Lincoln to demand delivery of sand during December? Has Lincoln acted ethically in this case? Allsopp Sand and Gravel v. Lincoln Sand and Gravel, 171 III. App.3d 532, 525 N.E.2d 1185, 1988 III. App. Lexis 939 (Appellate Court of Illinois)

Explanation / Answer

Abraham Lincoln was “a man of profound feeling, just and firm principles, and incorruptible integrity, He was so modest by nature that he was perfectly content to walk behind any man who wished to walk before him. I do not know that history has made a record of attainment of any corresponding eminence by any other man who so habitually, so constitutionally, did to others as he would have them do to him. Without any pretensions to religious excellence, from the time he first was brought under the observation of the nation, he seemed, like Milton, to have walks ‘as ever in his great Taskmaster’s eye.

Lincoln filed an answer containing general denials and affirmative defenses. Lincoln alleged Allsopp

(1) Did not supply sand of the quality specified in the contract and

(2) Wrongfully refused to make "special arrangements" to load out sand at the original contract price before the contract expired, but at a time outside Allsopp's regular operating season.

The evidence presented at the bench trial was as follows.

The dispositive issue on review is whether Allsopp's refusal to make special arrangements to load out sand in December at the original contract price was commercially reasonable. The trial court is the initial determiner of commercial reasonableness.

The trial court found it was commercially reasonable for Allsopp to refuse to make special arrangements with Lincoln in December absent an increase in price. Lincoln's request to load out at that time and at the original contract price was held to be both unreasonable and untimely. Our interpretation of the term "special arrangements" leads us to the Conclusion the trial court's finding was against the manifest weight of the evidence, even as viewed in a light most favorable to Allsopp.

Lincoln maintains the contract is indefinite and ambiguous due to the special arrangements language. Accordingly, Lincoln argues this court should construe the problem term in the context of the preceding language referring only to time, not price.

Due to the clearly divergent positions of the parties', the trial court's, and our own reading of the contract, we are compelled to conclude that the special arrangements language is ambiguous.

The distinction between Allsopp's seasonal operating hours and its load out hours is critical to our interpretation of the contract. Seasonal hours are governed by the calendar (March through November) and load out hours depend only on material availability.

The record and oral argument revealed Allsopp had 30,000 tons of sand already stockpiled on its premises when Lincoln requested delivery in December. Allsopp argues that its season closed in November. This gives added importance to "special arrangements" as Allsopp, by the contract, agreed to deliver sand until December 31, 1986.

The trial court found Allsopp had acted in a commercially reasonable manner and had performed all conditions required of it under the contract. Lincoln was found to have waived rejection of the parties' agreement when it took delivery of Allsopp's sand after discovering certain loads were contaminated. The court held the evidence sufficiently established Allsopp had supplied specification sand and that Lincoln's request to load out sand in December, outside Allsopp's regular operating season, was commercially unreasonable, Allsopp's damages were computed at $45,240.36.

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