Where a defendant has filed a motion for summary disposition and to dissolve preliminary injunction, that motion should be denied because the parties’ agreements are requirement contracts.
“This matter is before the Court on Defendant/Counter-Plaintiff Kamax Inc.’s Motion for Summary Disposition and to Dissolve Preliminary Injunction.
“Plaintiff FCA US LLC (‘FCA’) brings this action seeking to enforce automotive supply contracts with Defendants KAMAX, Inc. and KAMAX Mexico S. De R.L. De C.V. (collectively ‘Kamax’). FCA alleges that Kamax is obligated to supply FCA with fastener parts (the ‘Goods’) ‘for automobiles that FCA manufactures in seventeen of its major automobile manufacturing plants, representing nearly all of FCA’s North American assembly and powertrain manufacturing operations.’ It is alleged that ‘KAMAX is obligated to supply FCA with the Goods pursuant to the relevant Purchase Orders issued by FCA and accepted by KAMAX and subject to the terms and conditions set forth in the Production and Mopar Purchasing General Terms and Conditions’ (the ‘Agreements’).
“FCA alleges that the Agreements are requirement contracts under which Kamax is obligated to supply FCA with the Goods to meet FCA’s requirements set forth in FCA’s releases through the life of the applicable FCA vehicle program.
“The parties agree that, for the purposes of this Motion, the issue is whether the alleged Agreements for ‘approximately 65%-100% of our requirements’ are requirements contracts or release-by-release contracts.
“In Cadillac Rubber & Plastics, Inc v Tubular Metal Sys, LLC , 331 Mich App 416, 429; 952 NW2d 576 (2020) the Michigan Court of Appeals determined that the documents between the parties established the existence of a requirements contract. In Cadillac Rubber the terms and conditions, incorporated by reference in the purchase orders, stated that ‘Buyer shall purchase no less than one piece or unit of each of the Supplies and no more than one hundred percent (100%) of Buyer’s requirements for the Supplies.’ ... Thus, under Cadillac Rubber the 65%-100% range stated on the Purchase Orders in this case qualifies as a quantity term sufficient to establish a requirements contract.
“Based on the foregoing the Court concludes that the Agreements alleged in this case are requirement contracts. Accordingly, Kamax’s Motion for Summary Disposition on FCA’s Complaint and to Dissolve the Preliminary Injunction is denied.”
FCA US LLC v. Kamax Inc; MiLW 10-108060, 12 pages; Oakland Circuit Court; Valentine, J.
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