Breach of Contract

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7^th Circuit Court of Appeals

Case Name: BRC Rubber & Plastics, Incorporated v. Continental Carbon Company

Case No.: 17-2783

Officials: RIPPLE, KANNE, and HAMILTON, Circuit Judges.

Focus: Breach of Contract

This case involves a contract dispute over the sale and purchase of carbon black, an important ingredient in rubber products. BRC Rubber & Plastics, Inc. (“BRC”) seeks to recover from Continental Carbon Co. (“Continental”) costs that it incurred in purchasing carbon black from another supplier following Continental’s alleged repudiation of the parties’ supply agreement.

Initially, BRC claimed that the agreement was a requirements contract, i.e., a supply agreement in which Continental promised to provide all of the carbon black that BRC required. Because Continental failed to do so, the district court awarded summary judgment to BRC.

In a prior appeal, we rejected the characterization of the agreement as a requirements contract and, therefore, vacated the judgment. In remanded proceedings, BRC, without amending its complaint, pursued the alternative theory that the agreement is for the supply of a fixed amount of carbon black. The district court granted summary judgment to Continental for two reasons: BRC’s complaint failed to state a claim for relief under any theory of the agreement other than as a requirements contract; in the alternative, the agreement is unenforceable for a lack of mutuality and consideration.

BRC now appeals. For the reasons set forth in this opinion, we conclude that the parties’ agreement is enforceable and that BRC can proceed on its alternative characterization of the contract as an agreement for a fixed amount of carbon black. We, therefore, reverse and remand the case for proceedings consistent with this opinion

Reversed and Remanded

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Attorney Derek A. Hawkins is the managing partner at Hawkins Law Offices LLC, where he heads up the firm’s startup law practice. He specializes in business formation, corporate governance, intellectual property protection, private equity and venture capital funding and mergers & acquisitions. Check out the website at www.hawkins-lawoffices.com or contact them at 262-737-8825.