New England Structures, Inc. v. Loranger
Massachusetts Supreme Judicial Court
234 N.E.2d 888 (1968)
Theodore Loranger & Sons (Loranger), the general contractor on a school project, subcontracted the roof deck work to New England Structures, Inc. (New England). Their written contract reserved several grounds on which Loranger could terminate, including New England's failure to hire enough skilled workers. Loranger sent New England a telegram terminating the contract based solely on that ground, and New England responded that Loranger's own conduct had caused the delay. Loranger hired a replacement subcontractor and sued New England for the price difference; New England countersued, claiming wrongful termination. At trial, evidence of New England's poor workmanship was introduced, but the judge instructed the jury to evaluate the termination only on the ground stated in the telegram. The jury found for New England on both claims, and Loranger appealed the jury instruction.
Whether a party that terminates a contract citing one contractual ground is barred from relying on other reserved grounds in later litigation when the terminated party has not shown reliance on the originally stated ground.