Contracts Keyed to Knapp
Karl Wendt Farm Equip. Co. v. International Harvester Co
The Plaintiff, Karl Wendt Farm Equipment Co. (Plaintiff), entered into a franchise agreement with the Defendant, International Harvester (Defendant), establishing Plaintiff as a dealer of Defendant’s farm equipment. The agreement specified the terms under which the contract could be terminated. Thereafter, the farm equipment market suffered a recession and the Defendant suffered substantial losses. The Defendant decided to sell its farm equipment division to J.I. Case Co. (Case) and Tenneco Co. (Tenneco). Case and Tenneco did not acquire Defendant’s franchise network, but it did receive access to the dealers, most of whom received a franchise from Case. Plaintiff did not receive a franchise from Case and therefore sued Defendant, claiming breach of contract for loss of his franchise. Defendant argued impracticability and frustration of purpose. A directed verdict was found for Plaintiff.
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