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Franz Chemical Corp. v. Philadelphia Quartz Co.

Franz Chemical Corp. v. Philadelphia Quartz Co.

United States Court of Appeals for the Fifth Circuit

May 1, 1979

No. 77-1153

Opinion

 [*147]  On December 5, 1966, Franz Chemical Corporation (Franz) and Philadelphia Quartz Company (PQ) entered into a temporary, nonexclusive, nontransferable patent license agreement under which Franz was licensed to sell the PQ product QURAM 3365 and which provided for the future granting of a permanent license agreement. QURAM 3365 is a silicate vehicle comprising the operative ingredient of a corrosion-resistant coating which was in this instance to be used to protect the metal hulls of ships. In order to supply the coating for its jobs, Franz ordered from PQ the necessary QURAM 3365 to be resold as FranZinc 44. These orders were filled subject to a sales order acknowledgement form and warranty both of which limited PQ's liability for damages. The original license agreement authorized Franz to repackage QURAM 3365 as FranZinc 44 and market it [**2]  throughout the United States. This agreement was later modified to expand Franz' authorized selling territory to include Spain and Poland. In accordance with this expanded agreement Franz contracted with a Polish shipbuilding concern, Centromor, to supply FranZinc 44 as a coating to be applied to parts of two Mexican ships which were to  [*148]  be constructed by Centromor at its shipyards in Szczecin, Poland. The FranZinc 44, when applied in Poland, failed. 1 This lawsuit resulted.

Franz based its action against PQ upon three separate theories, only two of which concern us here. 2 First, Franz sought recovery for various damages claimed to have been sustained as a result of the failure of FranZinc 44. Second, Franz sought damages for PQ's wrongful refusal, after the expiration of a temporary license agreement, to grant Franz a permanent license. Relief was [**3]  denied by the district court when it granted PQ's two motions for partial summary judgment. We affirm.

On appeal Franz disputes the district court's finding that there existed no genuine issue as to any material fact and urges that the court's granting of the motions for partial summary judgment was in error. Additionally, Franz argues that the district court erred in deciding PQ's motion for partial summary judgment on the written submissions.

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594 F.2d 146 *; 1979 U.S. App. LEXIS 15031 **; 26 U.C.C. Rep. Serv. (Callaghan) 276; 27 Fed. R. Serv. 2d (Callaghan) 630

FRANZ CHEMICAL CORPORATION, Plaintiff-Appellant, v. PHILADELPHIA QUARTZ COMPANY, Defendant-Appellee.

Prior History:  [**1]  Appeal from the United States District Court for the Southern District of Texas.

CORE TERMS

district court, license, partial summary judgment, unconscionable, permanent license, genuine issue, motions, parties, terms

Business & Corporate Compliance, Contracts Law, Types of Contracts, Oral Agreements, Commercial Law (UCC), Form, Formation & Readjustment, Parol Evidence Rule, General Overview, Sales (Article 2), General Provisions, Policies & Purposes, Gap Filler Provisions, Civil Procedure, Summary Judgment, Opposing Materials, Judgments, Appeals, Reviewability of Lower Court Decisions, Preservation for Review, Remedies, Limitations & Modifications, Seller's Damages & Remedies, Limitation & Modification, Unconscionable Limitations, Application & Construction, Damages, Buyer Remedies, Damages, Exclusive & Optional Remedies, Documents of Title (Article 7), Buyer's Damages & Remedies, Types of Damages, Consequential Damages, Actions for Price, Governments, Courts