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Contracts Keyed to Fuller
Baxter Healthcare Corp. v. OR Concepts, Inc.
Citation:
869 F. Supp. 606 (N.D. Ill. 1994)Facts
In January 1992, Baxter and O.R. Concepts signed a Distribution Agreement under which Baxter would purchase $3 million of Thermadrape and other products from O.R. over a 27-month period. The Agreement contained an anti-assignment clause stating that “SUPPLIER shall not transfer or assign its interests in this Agreement without the prior written consent of BAXTER.” The Agreement did not state it was exclusive, nor did it prohibit stockholders from selling their shares in O.R. In November 1992, Jim Elder, O.R.’s majority stockholder, advised Baxter that he and others were selling about 95% of O.R.’s stock to Vital Signs, Inc., a competitor of Baxter. Elder remained president of O.R. until June 1993. Baxter subsequently claimed that O.R. had breached the Distribution Agreement by effectively assigning its interest to Vital Signs through the stock sale, and terminated the contract in May 1994.
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