Hornell Brewing Co. v. Spry Supreme Court of New York County 1997 1) Facts a) The Plaintiff, Hornell Brewing Co. (Plaintiff), granted the Defendant, Spry (Defendant), an exclusive right to distribute Plaintiff’s beverages in Canada. Throughout the parties’ relationship, the Defendant failed to remit timely payment for shipments of the beverage. The Plaintiff asked the Defendant to obtain a line of credit to secure their relationship. Payment in the amount of $79,316.24 was due to the Plaintiff by May 2, 1994, upon receipt of which the Plaintiff agreed to ship up to $300,000 worth of product to the Defendant. The Plaintiff did not receive payment until May 9, 1994, at which time the Defendant ordered a shipment in excess of the authorized amount of $300,000. Meanwhile, the Plaintiff learned that the Defendant’s Canadian operation was essentially a sham. The Plaintiff informed the Defendant that they would not ship any more goods to the Plaintiff until they received a letter confirming the existence of the Defendant’s line of credit. The Defendant did not respond, nor did it send the Plaintiff a copy of its credit agreement. 2) History a) The Plaintiff instituted this action, seeking a declaratory judgment terminating all contractual obligations between the parties. 3) Issue a) Was the repudiation of the contract reasonable i) Both parties undisputed actions over a period of many months created a mutual contract ii) 2-609, reasonable grounds for insecurity to demands adequate assurance of due performance and until he receives such assurance… if commercially reasonable suspend any performance for which he has not already received the agreed return iii) The plaintiff had grounds to be insecure based on the defendants ability to perform in the future iv) The plaintiff gave defendant a chance to prove he could make the payments, and defendant continually faulted and was unable to work within the deal v) Sprye also mislead the plaintiff about the scope of the operation and let Hornell to seriously doubt their ability to pay 4) Judgment: In favor of Plaintiff