Question

Creusot-Loire, a French manufacturing and engineering concern, was the project engineer to construct ammonia plants in Yugoslavia and Syria. The design process engineer for the two plants-as well as a plant being constructed in Sri Lanka-specified burners manufactured by Coppus Engineering Corporation. After the burner specifications were provided to Coppus, it sent technical and service information to Creusot-Loire. Coppus expressly warranted that the burners were capable of continuous operation using heavy fuel oil with combustion air preheated to 260 degrees Celsius. The warranty extended for one year from the start-up of the plant but not exceeding three years from the date of shipment. In January 1989, Creusot Loire ordered the burners for the Yugoslavia plant and paid for them; in November 1989, the burners were shipped to Yugoslavia. Due to construction delays, the plant was not to become operational until the end of 1993. In 1991, however, Creusot-Loire became aware that there had been operational difficulties with the Coppus burners at the Sri Lanka and Syria plants and that efforts to modify the burners had been futile. Creusot-Loire wrote to Coppus expressing concern that the burners purchased for the Yugoslavia plant, like those in the other plants, would prove unsatisfactory and asking for proof that the burners would meet contract specifications. When subsequent discussions failed to satisfy Creusot-Loire, it requested that Coppus take back the burners and refund the purchase price. Coppus refused.
Finally, Creusot-Loire indicated that it would accept the burners only if Coppus extended its contractual guarantee to cover the delay in the start-up of the Yugoslavia plant and if Coppus posted an irrevocable letter of credit for the purchase price of the burners. When Coppus refused, Creusot-Loire brought an action for breach of contract, seeking a return of the purchase price. Coppus claimed that Creusot-Loire's request for assurance was unreasonable. HoWshould the court rule?



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