Business Law Marty Finucane
Summer 2013 You Be the Judge – 2

SUBJECT: The Marley Cooling Tower Company v. Caldwell Energy & Environmental, Inc., 280 F. Supp. 2d 651 United States District Court for the Western District of Kentucky, 2003

A. Facts
From the case notes, Caldwell manufactures and installs cooling systems for power plants. There was an agreement between Caldwell and Duke/Fluor Daniel to install one of their systems in South Carolina. Part of the contract stated that Caldwell would “pay liquidated damages of $5,000 per day if the system was late”.
The Marley Cooling Tower Company made a pact to ship all materials needed for the construction of this cooling unit and that it would deliver on or before April 1. According to this contract, “Neither Marley or the Purchaser shall be responsible or held liable for any special, indirect, consequential, liquidated, and/or punitive damages.” Also agreed upon was that there was not to be any changes in the contract unless a written and signed documents stated as such.
The materials were delivered by Marley 2 months after the April 1st deadline agreed upon in the contract with Caldwell and as a result, Caldwell did not meet its deadline for manufacturing and installing the cooling system and was assessed damages of $135,000 by D/FD. Caldwell then tried to transfer the cost to Marley by paying the same sum less than what was charged by Marley, calling it “backcharges”.
A subsequent letter from Marley to Caldwell stated “we would like to work with your to resolve this issue. However, before we can agree to these backcharges, we must have [certain specified] documents.” Caldwell supplied said documents, along with a change order (which would show that Marley had accepted the backcharges) that needed to be signed by both parties to become valid, and Marley verbally agreed