Contracts I, Pages 61–68

Pennsy Supply, Inc. v. American Ash Recycling Corp.

Superior Court of Pennsylvania, 2006

Facts:

Pennsy was contracted to pave some driveways and a parking lot. They were notified that American Ash had a certain amount of a material called TAA that could be used for this job. They picked it up and did the job using it. The pavement soon developed extensive cracking however, which Pennsy repaired at no cost to their employer. This included the removal and disposal of the hazardous TAA. Pennsy asked American Ash to dispose of the TAA, which they refused. Pennsy then notified American Ash that they intended to recover costs, which was $251,940.20 to repair the pavement and $133,777.48 to dispose of the cracked TAA.

Procedural History:

Trial court granted a preliminary objection in the nature of a demurrer for the defendant.

Issues:

  • Is a contract formed when a something is given which needs to be disposed of?

  • Is it a sale of goods when a something is given which needs to be disposed of?

Rules:

  • When a gift's consideration has an overall benefit to the giver, it is implied to be consideration.

  • Disposing of something at a cost is a sort of payment.

Reasoning:

American Ash sought to dispose of the TAA for the undisclosed purpose of not paying disposal costs. This gave them consideration for a contract for as much. It was also a sale as Pennsy disposing of the TAA was their payment for taking it.

Holding:

Yes, a contract is formed and it is a sale of goods when something is given that needs to be disposed of. Reversed and remanded for further proceedings.

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