Pennsy Supply Inc. v. American Ash Recycling Corp. of Pennsylvania PDF

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Penny Supply Inc. v. American Ash Recycling Corp. of Pennsylvania Case Brief....

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Pennsy Supply, Inc. v. American Ash Recycling Corp. of Pennsylvania Pennsylvania Superior Court (2006) 

Facts o Pennsy was involved in a state project and was hired to do paving of driveways and a parking lot o It contracted with American Ash, who provided the material for free, which was supplied o After the work was completed, the pavement cracked and Pennsy had to ultimately replace the materials (which turned out to be toxic waste) that were provided o Pennsy requested a reimbursement from the supplier for remediation work and disposal of the material to no avail, and thus filed a five-count complaint. o American Ash filed objections on all five counts.

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Procedural History o Pennsy filed a five-count complaint o American Ash filed objections on all five counts.

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o The lower court dismissed the complaint concluding that there was no allegation of consideration to support the subcontractor's breach of contract claim. The case was appealed to the Superior Court of Pennsylvania Issue o Was there consideration sufficient to find a breach of contract?

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Rule o A cause of action for breach of contract must be established by pleading: (1) the existence of a contract, including its essential terms, (2) a breach of a duty imposed by the contract and (3) resultant damages. While not every term of a contract must be stated in complete detail, every element must be specifically pleaded. Clarity is particularly important where an oral contract is alleged.

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Reasoning o American Ash received a benefit in the transaction, when Pennsy hauled away the material for free, thus saving American Ash thousands of dollars in disposal costs o The Court quoted the Second Restatement of Contracts when they said, the bargain theory of consideration does not actually require that the parties’ bargain over the terms of the agreement o According to Holmes, an influential advocate of the bargain theory, what is required [for consideration to exist] is that the promise and the consideration be in 'the relation of reciprocal conventional inducement, each for the other.'

o The Court concluded with "...here, as explained above, the Complaint alleges facts which, if proven, would show the promise induced the detriment and the detriment induced the promise. This would be consideration." o Grounding contracts and the warranty claims brought by the disposer, constitutes sufficient ground for relief of a manufacturer’s obligation, to dispose of a material classified as hazardous waste, such that the cost of disposal is avoided by the manufacturer o A very important element of an enforceable contract which must be bargained for as an exchange for a promise is consideration, which can be further defined as a benefit to the promisor or a detriment to the promise o That the promisee has suffered a legal disadvantage at the request of the promisor is not adequate o The disadvantage suffered by the promisee must be “quid pro quo” of the promise and the inducement for which it is made o Therefore, a promise is said to be gratuitous and the satisfaction of the condition is not consideration for a contract if the promisor merely had the intention to make a gift to the promise upon the performance of a condition o The allegations which Pennsy (P) made against American Ash (D) in this case not only pointed out that the defendant made a conditional gift of the AggRite to the plaintiff, but that American Ash (D) in order to avoid the cost of disposing the AggRite, gave out the AggRite in an effort to transfer the cost burden on the disposal o Therefore, Pennsy (P) assumed the detriment of collecting and taking title to the material because Pennsy (P) was induced to receive the supply of AggRite free of charge from American Ash (D) o The detriment Pennsy (P) now suffers was the same detriment which induced American Ash (D) to give out the AggRite free of charge o The absence of an actual bargaining process between the parties is not necessary to establish consideration, but this merely shows that the promise induced the detriment, and the detriment induced the promise if the fact is proven o If the allegations Pennsy (P) made against American Ash (D) can be proven to be true, this would indicate sufficient consideration to support estoppel claims, breach of contract and breach of warranty 

Holding o The trial court’s order is reversed and remanded for further proceedings...