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Contracts Keyed to Kuney
AMF, Inc. v. McDonald’s Corp.
Citation:
536 F.2d 1167 (1976).Facts
AMF produced a prototype computerized cash register, the 72C. The register had a central computer system to which the counter registers were attached. The computer also provided data for accounting reports and bookkeeping. In April 1968, McDonald’s ordered a unit that accommodated six registers for its restaurant in Elk Grove, Illinois (its busiest restaurant). In August 1968, McDonald’s ordered sixteen more registers for its wholly-owned subsidiaries and seven additional orders for its licensees. However, operation of the prototype at Elk Grove proved problematic and the register performed poorly. At a meeting in March 1969, McDonald’s asked that production of the 23 new registers be delayed due to the problems. At a meeting in May 1969, the parties were unable to reach an agreement about performance and reliability standards. Additionally, it was apparent that the personnel at the Ohio plant were too inexperienced to timely build the registers. In July 1969, the parties reached a mutual understanding that the contracts were cancelled.
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