Zemco Manufacturing, Inc. v. Navistar International Transptoration Corp.

186 F.3d 815 (7th Cir. 1999)

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Nature of the Case

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Facts

Zemco manufactured and supplied parts to Navistar from 1968-1995. In 1983, the parties entered into a written contract that was renewable on a yearly basis. From that date until 1995, Navistar purchased all its requirements from Zemco. In January 1995, the sole shareholders of Zemco fell into disagreement. Pecoraro sold his interest in the company to Zemen. Pecoraro then went out and started another company to compete with Zemco. Navistar then began to buy parts from the new company and to phase out its purchases from Zemco. Apparently Zemco (P) must have sued Navistar (D), but that is not clear from the facts given in the casebook. The district court held that the renewal of the contract between P and D did not comply with the statute of frauds. In 1983, the parties entered into the original written contract for the sale of parts. The contract was to last one-year, but it was extended by written agreements until 1987. There was no written extension since 1987, but there were oral agreements. D contends that the oral agreements violate the statute of frauds and are thus voidable. P contends that these renewals need not be in writing because they merely modify a nondefinite contract term. The trial court granted summary judgment and P appealed.