Opinion ID: 1479677
Heading Depth: 1
Heading Rank: 5

Heading: by George K. Geiger, President

Text: Although the parties never reached agreement as to any of the open terms contained in this writing, in 1973, Bethlehem formally notified Litton that it was exercising its option to purchase three more ore ships of the type specified in the December 31, 1968 letter. Litton refused to perform under the terms of the 1968 letter, and Bethlehem brought an action against Litton claiming that it had repudiated its obligations under the 1968 letter, which Bethlehem characterized as an option agreement, and that its actions constituted an anticipatory breach of this agreement. Bethlehem's damages for the alleged breach were stated at $95 million. Litton filed counterclaims in assumpsit for lost profits which it allegedly would have made on the building of the three vessels, had Bethlehem negotiated in good faith, and in trespass, for consequential and punitive damages for Bethlehem's alleged failure to negotiate in good faith. A trial was then conducted in the Allegheny County Court of Common Pleas before Judge Maurice Louik. The proceedings lasted some nine months and produced more than 12,000 pages of testimony and 500 exhibits. It can hardly escape notice that the proceedings were somewhat protracted. As counsel for Litton noted during final argument, May it please the court. Now . . . we enter into the fourth season in this case  we started in summer, went through the fall and winter and it's now spring, although the snowflakes are still falling. . . . In spite of the complexity of the case and the length of the litigation, or perhaps because of it, the parties were able to agree that the trial should be bifurcated on the issues of liability and damages. The trial court, without reaching the issue of damages, decided the liability issue against Bethlehem. On appeal, a divided Superior Court affirmed, Judges Hester, Rowley and Wieand dissenting. 321 Pa.Super. 357, 468 A.2d 748. We granted allocatur. Judge Louik held that Bethlehem's action must fail because there was no enforceable agreement between the parties since the price term was so indefinite as to render the court unable to fill the gap. The Superior Court majority stated that the trial court held that the plaintiff-appellant had not sustained its burden of proving that the parties intended to be contractually bound. 321 Pa.Superior Ct. at 359, 468 A.2d at 748. The Superior Court majority also observed that the intent to contract is a question of fact which must be affirmed on review if the lower court's finding that there was no intent to contract was supported by competent evidence. After reviewing the evidence, Superior Court held that the trial court's finding as to the intent of the parties must be affirmed because it was supported by competent evidence and because the lower court had not abused its discretion. Superior Court also noted the lower court's determination that the parties had not included the terms necessary to calculate the escalation in price referred to in the contract. These open terms, according to Superior Court, supported an inference that the parties did not intend to be legally bound. [2] The dissent, however, observed that under the Uniform Commercial Code, a contract may be made in any manner which indicates agreement, including conduct, and that when a contract exists, it will not fail if there is a reasonably certain basis for fashioning a remedy. 13 Pa.C.S.A. § 2204. The dissent then determined that the conduct of the parties indicated an intent to enter a legally binding contract and that under 13 Pa.C.S.A. § 2305, the section of the code concerning contracts containing an open price term, a reasonable price at the time of delivery is the proper remedy and that the court is capable of fashioning such a remedy.