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First Circuit Upholds an Implied Contract Between a Manufacturer and a Distributer
Posted in Contracts

The First Circuit Court of Appeals has upheld a finding that an implied contract was formed between a manufacturer and a distributor, and an award of damages to the distributor based on that contract. Primarque Prod. Co. v. Williams West & Witts Prod. Co., 988 F.3d 26 (1st Cir. 2021). For almost 40 years, Williams West & Witts Products Co. (WWW) and Primarque Products Co. had a manufacturerdistributor relationship for the sale of soup base products. Except for a six-year period, the relationship was not governed by a written contract — WWW simply manufactured products in response to purchase orders from Primarque and delivered those products to Primarque’s customers. In 2015, Primarque began purchasing more soup base products from WWW’s competitors, resulting in a decrease in its purchases from WWW. Two days after learning of this, WWW terminated its relationship with Primarque and began selling products directly to Primarque’s former customers. Primarque sued WWW, alleging, among other things, breach of contract and tortious interference with business relations. At trial, the jury
awarded Primarque damages on both of those claims, and the court denied WWW’s post-trial motions for judgment as a matter of law.

The central issue on appeal was whether Primarque had an enforceable contract and whether that contract was subject to a Massachusetts’ statute requiring reasonable notice before termination of contracts. The court of appeals found that Primarque had sufficiently shown that an enforceable contract had been implied-in-fact by the parties’ course of conduct, despite the lack of an oral or written agreement and that the Massachusetts statute requiring reasonable notice of termination applied to that contract. Accordingly, the First Circuit affirmed the trial court’s award of damages to Primarque.

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