Carding Specialists (Canada) Ltd. v. Gunter & Cooke, Inc. , 32 N.C. App. 485 ( 1977 )

VAUGHN, Judge.

In addition to the settlement agreement wherein defendant agreed to pay damages for patent ■ infringement, the parties also entered into another agreement wherein defendant was granted a license to manufacture equipment supposedly covered by plaintiffs’ patent and wherein defendant was to pay royalties for goods manufactured and sold under that license. Defendant contends that plaintiffs’ threat to terminate the licensing agreement relieves it of its obligations under the contract sued on. We conclude that the trial judge correctly decided that defendant’s obligations under the agreement sued on were not conditional on the continuance of the licensing agreement. Defendant also contends that it was impossible to fill such a large order as that placed by plaintiffs and that it was obviously placed in bad faith. The judge did not err in failing to reach those conclusions. The contract between the parties set out no specific time for delivery of the goods defendant was obligated to deliver. Defendant would have, therefore, had a reasonable time to make delivery on the order. The record makes it clear that defendant made no effort to fill the order.

Plaintiffs and defendant have both appealed from the damages awarded. The judge concluded (1) plaintiffs were entitled to $110,000 for the breach; (2) plaintiffs were not entitled to interest from the breach; and (3) they were not entitled to recover $11,000 in profits allegedly lost in consequence of the breach. There is some merit in the arguments of all the parties and we reverse that part of the judgment relating to the amount of damages.

The contract provided that the $110,000 “shall be payable as provided in paragraph 3 hereof.” The sum was, therefore, payable only in goods. ,In effect, goods were bartered for the release. Plaintiffs may or may not have been entitled to receive all of the 525 units it ordered. The number of units to which plaintiffs were entitled under the barter agreement should be computed by taking the lowest mill price per unit (applicable to bulk sales and less 10%) and dividing that price into $110,000. Plaintiffs’ damages would then be the fair market value of the number of units to which they were entitled at the time they were entitled to receive them, plus interest from that time.

That part of the judgment fixing damages and interest is reversed and the case is remanded.

Reversed and remanded.

Judges Hedrick and Clark concur.