Kermit Johnson formed FB&I Building Products, Inc., in Watertown, South Dakota, to sell building materials. In December

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Kermit Johnson formed FB&I Building Products, Inc., in Watertown, South Dakota, to sell building materials. In December 1998, FB&I contracted with Superior Truss & Components in Minneota, Minnesota, “to exclusively sell Superior’s open-faced wall panels, floor panels, roof trusses and other miscellaneous products.” In March 2000, FB&I agreed to exclusively sell Component Manufacturing Co.’s building products in Colorado. Two months later, Superior learned of FB&I’s deal with Component and terminated its contract with FB&I. That contract provided that on cancellation, “FB&I will be entitled to retain the customers that they continue to sell and service with Superior products.” Superior refused to honor this provision. Between the cancellation of FB&I’s contract and 2004, Superior made $2,327,528 in sales to FB&I customers without paying a commission. FB&I filed a suit in a South Dakota state court against Superior, alleging, in part, breach of contract and seeking the unpaid commissions. Superior insisted that FB&I had materially breached their contract, excusing Superior from performing. In whose favor should the court rule, and why?

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Business Law Today The Essentials

ISBN: 978-0324786156

9th Edition

Authors: Roger LeRoy Miller, Gaylord A. Jentz

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