Wagner Excello Foods v. Fearn Int'l

235 Ill. App. 3d 224, 176 Ill. Dec. 258, 601 N.E.2d 956 (1992)

 

RULE:

To be enforceable, a contract must show a manifestation of agreement between the parties and be definite and certain in its terms. When material terms and conditions are not ascertainable, there is no enforceable contract, even if the intent to contract is present. Under the Illinois Uniform Commercial Code, a contract for the sale of goods will not fail for indefiniteness, however, if the parties have intended to make a contract and there is a reasonably certain basis for giving an appropriate remedy, pursuant to 26 Ill. Comp. Stat. § 2-204(3).  A waiver is an intentional relinquishment of a known right which may be express or implied from the conduct of the party that has allegedly waived its right. The waiver of a contractual provision may be established by conduct indicating that strict compliance with the provision will not be required.

FACTS:

Plaintiff food manufacturer and defendant food corporation entered into a five-year contract where plaintiff agreed to produce and package various fruit drink concentrates. The contract contained minimum quantity purchase requirements and provided that the price of the concentrates would be reviewed quarterly. Plaintiff hired additional employees and purchased equipment, but defendant purchased only 19.2, 12, and 8.9 percent of the required amounts respectively in the first three years of the agreement. The circuit court concluded that a revised agreement either modified or supplanted the original agreement, waiving the minimum quantity guarantees. The court affirmed the order of the circuit court, dismissing plaintiff's breach of contract claim against defendant. However, the court remanded for further consideration of the question of fact of whether the parties intended to remove the minimum quantities requirement in the revised contract.

ISSUE:

Was the contract between plaintiff food manufacturer and defendant food corporation enforceable despite defendant’s contention that the initial agreement between the parties was merely an agreement to agree as there was no fixed price? Did plaintiff food manufacturer waive its right to object to defendant food corporation’s noncompliance with the agreed minimum purchase requirements?

ANSWER:

Yes.

CONCLUSION:

The contract between plaintiff food manufacturer and defendant food corporation was enforceable because it showed a manifestation of agreement between them and was definite and certain in its terms. 26 Ill. Comp. Stat. § 2-305(1) provided for a reasonable price at the time of delivery if the contract contained an open price term.  Plaintiff food manufacturer waived its right to object to noncompliance, having not filed suit until the fourth year of the contract. The contract between the parties extended over a four-year period and involved at least three opportunities every year where the agreement would not continue unless an agreement on price was reached. Plaintiff knew exactly how much defendant food corporation was buying and that defendant had not come close to the minimum purchase guarantees established in the agreement during any year of the contract.

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