Note: Microvote Corporation obtained a perfor-mance bond in favor of Montgomery County, Pennsylvania from Westchester Fire Insurance Co. in connection with the sale of voting machines. As partial security, the surety required Microvote to obtain a standby for US$150,000 in its favor. When the County declared the contract to be in default, it failed to provide the surety with adequate notice to permit a drawing on the LC before it expired. In an action by the County against the surety, the surety argued that the amount of the LC should be set off. The trial court instructed the jury as follows: "I instruct you to find that the letter of credit in the amount of $150,000 which Microvote obtained for WestChester's [sic] benefit as collateral security expired on June 1, 1996. Had the County given Westchester timely notice of Microvote's default, WestChester [sic] would have been able to make a timely draw against the letter of credit. As a result, WestChester [sic] would have been prejudiced in the amount of $150,000, and WestChester's [sic] obligation under the performance bond have been discharged by at least that amount, that is if you find that a reasonable time had passed, that notice -- they would have a reasonable time within which to give such notice". On these instructions, a jury entered a verdict for Microvote. The County alleged that the judgment constituted error. On a post trial Motion for Relief from the Judgment, the U.S. District Court for the Eastern District of Pennsylvania, Kelly, J., denied the motion, concluding that the charge, taken as a whole, "properly appraised the jury of the issues and the applicable law"..


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