Manchester Pipeline Corp. v. Peoples Natural Gas Co.
United States Court of Appeals for the Tenth Circuit
862 F.2d 1439 (10th Cir. 1988)
During gas-purchase negotiations, Peoples Natural Gas (PNG) (defendant) sent Manchester Pipeline (plaintiff) several sample contracts stamped 'draft copy,' but eventually sent three unstamped copies of a 'Gas Purchase Contract' along with a letter asking Manchester to review, execute, and return them if acceptable; Manchester signed and returned the ten-year contract, but PNG never signed and told Manchester it wouldn't. Manchester mitigated by contracting with a third party and sued for breach; PNG argued no contract existed because Manchester should have known PNG didn't intend to be bound until PNG itself signed, and PNG's own employee Donovan testified he often (but not always) told counterparties his offers were subject to management approval. The jury found a contract existed, and the district court instructed the jury to calculate year-one damages based on market price while giving it discretion to speculate about market uncertainty in years two through ten; PNG appealed both the contract-formation finding and the damages instruction.
Whether a contract requires a meeting of the minds on all material elements, and whether damages for anticipatory repudiation brought before the time for performance are calculated based on the market price when the aggrieved party learned of the repudiation.