Steel shortages suddenly disrupted the construction industry. Amid the economic turbulence, a steelworker expresses to his general contractor doubts about the ability to get steel for the job. Does the contractor have the right to terminate the contract, find another steelworker, and sue for damages?

(As you consider the story of this case, think about how it relates to our times. For example, what if a janitorial service and supply company expressed doubt about its ability to get toilet paper and disinfectant?)

By contract dated May 1, 1950, Minweld Steel Co. promised to provide steel and steelwork to McCloskey & Co., a general contractor who was building a hospital. On June 13, Minweld submitted its timeline to complete the work.
The Korean War broke out on June 25, 1950. The war effort promoted steel shortages. Supplies were diverted to military equipment. Steelworkers became soldiers – some 1.5 million America were conscripted to fight overseas. (Later, as the war wore on, President Harry S Truman even tried to nationalize the steel industry.)

On July 26, Minweld sent a letter to McCloskey: “we solicit your help and that of the General State Authority in aiding us to order the steel for these contracts. We are anxious as you are that there by no delay in the final completion of the buildings or in the performance of the contract.”
McCloskey promptly responded by cancelling the contract and hiring someone else to do the work. Was this termination permitted as a matter of law?

The answer turns on whether Minweld’s letter constituted a “repudiation.” Check out the video for details!

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