## Facts

- A buyer and seller entered a written contract for the sale of 2,600 tons of section relaying rails at $41 per ton, to be delivered in New York harbor.
- The seller later asserted that the supply of such rails was very limited and that market availability tightened after the contract.
- While the seller attempted to obtain rails to perform, the buyer also purchased substantial quantities of similar rails from other sellers in the marketplace.
- The seller claimed the buyer’s independent purchases reduced available supply and increased market prices, making performance impossible or impracticable.
- The seller delivered no rails under the contract.
- The buyer obtained substitute rails on the market at a higher price (reported as above $49 per ton) and sued for the price differential as damages.

## Issues

1. Whether a seller may be excused from a fixed-price sales contract because performance becomes more difficult or unprofitable due to market changes, including higher prices and limited supply.
2. Whether the buyer’s independent purchases of similar goods constituted wrongful interference or prevention that excused the seller’s nonperformance.

## Decision

- The Supreme Court of Pennsylvania affirmed judgment for the buyer.
- The court held that increased difficulty, expense, or reduced profitability from market conditions did not excuse the seller’s nonperformance of a fixed-price contract.
- The buyer’s independent market purchases did not amount to contractual breach, wrongful interference, or prevention of performance because the contract imposed no duty to refrain from purchasing elsewhere and no intentional obstruction was alleged.
- The buyer was entitled to damages measured by the difference between the contract price and the market/cover price paid after the seller’s failure to deliver.

## Legal Principles

- A party is not discharged from contractual performance merely because performance becomes more difficult, more expensive, or less profitable than anticipated.
- The prevention/interference doctrine excuses performance only where the promisee wrongfully or intentionally prevents the promisor’s performance; incidental market effects from lawful conduct are insufficient.
- Absent an express or implied contractual restriction, a buyer may purchase similar goods from other sources without breaching the contract or excusing the seller’s duty to perform.
- When a seller fails to deliver, the buyer may obtain substitute goods and recover expectation damages based on the contract–market differential.

## Conclusion

The court enforced the fixed-price sales contract and rejected impossibility or prevention defenses based on adverse market conditions and the buyer’s independent purchases, holding that market risk and increased cost remained with the seller and that the buyer could recover the cover-price differential.


Iron Trade Prods. Co. v. Wilkoff Co., 272 Pa. 172, 116 A. 150 (Pa. 1922)