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Chase Precast Corp. v. John J. Paonessa Co. | 566 N.E.2d 603 (1991)

What happens if unforeseen events take away the purpose of a contract? Chase Precast Corporation versus John J. Paonessa Company is a concrete example of the effect of an outside barrier to a bargain.

The Massachusetts Department of Public Works entered into two contracts with John J. Paonessa Company to resurface and improve a highway. Part of each contract called for concrete barriers to replace grass median strips, and Paonessa entered into a contract with Chase Precast Corporation to supply the necessary barriers. After the highway project began, angry residents protested the replacement of the grass median and filed a lawsuit to halt the project. Because Paonessa thought that the litigation would force the Department of Public Works to change the contract, Paonessa asked Chase to stop making the concrete barriers it had ordered. Chase stopped work, and Paonessa paid for all of the barriers that Chase had already delivered to the work site. Ultimately, the litigation caused the Department of Public Works to delete the concrete median barriers from its contracts with Paonessa.

Chase sued Paonessa to recover its anticipated profit on the remaining balance of the contract, and Paonessa filed a cross-action against Massachusetts for indemnification in case it was found liable. The trial court ruled in Paonessa’s favor. Chase and Paonessa cross-appealed, and the appeals court affirmed. Chase then appealed to the supreme judicial court.

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