Ralph's Distributing Co. v. Amf, Inc.

667 F.2d 670 (8th Cir. 1981)

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Nature of the Case

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Facts

Ralph’s (P) entered into a franchise agreement with AMF (D) in May 1968 to wholesale distribute Ski-Daddlers. A franchise agreement was executed in June 1969. The agreement was accompanied by letters designating P’s sale territory for the upcoming snowmobile season. In May 1970, the franchise agreements were incorporated by reference in a letter from D extending the contract. The letter included a designation of P’s territory. No further writings were executed, and the parties continued operations under the agreements into the 1971-1972 season. P bought Daddlers from D and resold them to dealers in the designated territory. The program was unsuccessful, and during the 1971-1972 season, D decided to discontinue the line and to consolidate all snowmobile manufacturing and marketing activities in Harley-Davidson. D then began to sell its remaining inventory of Daddlers directly to Harley dealers bypassing P and other wholesale distributors. P sued D alleging a breach of contract. P contends that by designating its sales territory, the parties intended to make P the sole distributor in that territory; that even if the parties did not include an exclusivity term in the initial agreement they had done so by subsequent oral modifications of the 1968-1969 franchise agreements. The trial court granted D summary judgment on the pleadings. P appealed.