18.ALPAC and Eagon are corporations that import and export raw logs. In April, Setsuo Kimura, ALPAC’s president, and C.K. Ahn, Eagon’s vice president, entered into…


18.ALPAC and Eagon both import and export raw logs. In April, Setsuo Kimura, ALPAC’s president, and C.K. Ahn, Eagon’s vice president, entered into a contract for ALPAC to ship about 15,000 cubic meters of logs between the end of July and the end of August. Eagon accepted to buy them. Eagon was less likely to sign the contract when the market started to weaken for logs. ALPAC began to worry that Eagon would attempt to cancel the contract. Kimura and Ahn met several times and wrote letters to ALPAC, apparently in order to assure them that Eagon would acquire the logs.

Eagon, concerned about the decline in timber prices, initially refused to approve the shipment. Ahn sent numerous internal memoranda to the home office indicating that it might not wish to complete the deal, but that accepting the logs was “inevitable” under the contract.

Eagon received an ALPAC fax on August 23 suggesting that the price and quantity of the contract would be reduced. Eagon refused to respond. Kimura then asked Ahn if he planned to accept the logs. Ahn said that approval was difficult for him. Ahn told the home office on August 30 that he was going to try to reject the logs, but it was difficult. He suggested that ALPAC be held responsible for any delays in shipment. Kimura then believed Eagon would refuse to accept the shipment. He eventually decided to cancel the vessel used for shipping the logs. Kimura thought Eagon was cancelling the contract. Ahn and Kimura discussed the contract, but logs weren’t loaded nor shipped before August 31. Ahn informed Kimura on September 7 that he was going to try and convince the company to take delivery. He also indicated that he didn’t want Kimura selling the logs. Ahn told Eagon the next day that it might accept the shipment either in September or Oct.

ALPAC still hadn’t sent the logs on September 27, and wrote a last letter to Eagon, stating it had violated its contract by failing to deliver the logs. Eagon responded to the letter, stating that there was “no contract” because ALPAC’s breach (not shipping by the deadline) excused Eagon’s performance. Please explain whether the other party violated the agreement.


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