Bak-a-lum Corp. of America v. ALCOA Bldg. Prods., Inc

Facts

Defendant, ALCOA Bldg. Prods., Inc., manufactures aluminum siding products. Plaintiff, Bak-a-lum Corp. of America, is an exclusive distributor of Defendant’s products since 1962 or 1963, based on a verbal agreement with Defendant. Thereafter, Defendant terminated agreement in January 1970 when Defendant hired four additional distributors in the same area geographically. Also, Plaintiff had just entered into a new lease that gave Plaintiff a substantially enlarged warehouse facility to use to distribute Defendant’s products. Plaintiff brought suit against Defendant for breach of contract. At trial, Plaintiff produced evidence that indicated Defendant’s actions in terminating the exclusive distributorship agreement would result in a $10,000 loss of profits for Plaintiff. Further, the trial court ruled that there was a binding and enforceable agreement between Plaintiff and Defendant. Also, the trial court held that the agreement was only terminable after a reasonable period of time and on reasonable notice was given to the other party. Additionally, the trial court held that Defendant purposefully withheld its decision to break the exclusive distributorship agreement Plaintiff to avoid Plaintiff’s zealous distribution of Defendant’s products. Likewise, based on the agreement, the trial court held that a reasonable period time had passed on the contract, and concluded that a reasonable notice to Plaintiff is seven months. The trial court determined Plaintiff’s lost profits to be $5,000 monthly and provided Plaintiff $35,000 in damages. Both parties appealed.