00-3821 Praefke Auto Electric & Battery Co., Inc. v. Tecumseh Products Co., Inc.

Listen to this article

“Praefke was not a Tecumseh dealer, and so the statute is inapplicable. A dealership, so far as bears on this case, is created by (1) a ‘contract or agreement, either express or implied, whether oral or written,’ by which (2) ‘a person is granted the right to sell or distribute goods or services,’ in which (3) there is ‘a community of interest in the business of offering, selling or distributing goods or services.’ Wis. Stat. sec. 135.02(3)(a). The second requirement is satisfied here, but not the other two requirements. There was no contract between Tecumseh and Praefke. The contract was between Industrial and Praefke. Tecumseh insisted on a right of approval of Industrial’s subdistributors because they would be distributing Tecumseh’s parts at wholesale, a responsible function that if performed incompetently could injure Tecumseh’s reputation. By reserving this right, Tecumseh was not making any commitments to Praefke.”

Reversed.

Appeal from the United States District Court for the Eastern District of Wisconsin, Adelman, J., Posner, J.