Loral Corporation had a contract with the U.S. government to manufacture radar sets. Loral subcontracted with Austin Instrument for the production of precision parts to be used in the radar sets.
In the middle of production, Austin told Loral that it would deliver no more parts unless Loral agreed to pay Austin a good deal more than originally agreed upon. Loral could not obtain the same parts in time from any other company. As a result, Loral agreed to the price increase.
After delivering the radar sets, Loral sued Austin and asked the court to rescind the price increase. Did the court grant Loral's request? Explain.
Austin Instrument, Inc. v. Loral Corporation, 272 N.E.2d 533 (NY).