Monetti, S.P.A., v. Anchor Hocking Corporation

931 F.2d 1178 (7th Cir. 1991)

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Nature of the Case

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Facts

P began negotiations with the Schneiders to grant the Schneiders the exclusive right to distribute P's products in the United States. P would turn over to them all of P's USA Subsidiary's (Melform) assets as part of the deal. During the negotiations, the Schneiders sold their importing firm to D. Their firm became a division of D, and the Schneiders remained in charge. D sent P a telex requesting preparation of an agreement 'formalizing our exclusive for the United States.' P terminated all of Melform's distributors and informed all of Melform's customers that D would become the exclusive U.S. distributor of P products on December 31, 1984. P and D met, and P submitted a draft the principal provisions: D would be the exclusive distributor in the U.S., the contract would last for ten years, and during each of these years D would make specified minimum purchases of Monetti products, adding up to $27 million over the entire period. D did not sign this or any other draft of the agreement. D did prepare a memo where it agreed to everything except they also wanted Canada as part of the deal. Shortly after the meeting, P turned over to D all of the inventory, records, and other physical assets, together with trade secrets and know-how for Melform. In May 1985, D fired the Schneiders. P requested a meeting between the parties, and it was held on May 19. A memo dated June 12, 1985, from Raymond Davis, marketing director of D's food services division, to the law department of D, states that 'In the middle to latter part of 1984 Irwin Schneider and his company were negotiating an agreement with P to obtain exclusive distribution rights on Melform's plastic tray product line in the United States'; 'later, this distribution agreement was expanded to also include Canada, the Caribbean, and Central and South America'; there had been many meetings between the parties, including the meeting of May 19 (at which Davis had been present); 'Exhibit A (attached) represents the summary agreement that was reached in the meeting. You will notice that I have added some handwritten changes which I believe represents more clearly our current position regarding the agreement. . . . Now that we have had our 'New Management' [i.e., the management team that had replaced the Schneiders] meeting with P, both parties would like to have a written and signed agreement to guide this new relationship.' Exhibit A to the Davis memo is identical to Attachment #1 to Steve Schneider's memo, except that it contains the handwritten changes to which the Davis memo refers. The agreement collapsed, and P sued D for breach of contract. D invoked the statute of frauds.