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Sales Keyed to Keating
Sanchelima International, Inc. v. Walker Stainless Equipment Co.
Citation:
920 F.3d 1141 (2019)Facts
In 2013, Sanchelima International, Inc. and Walker Stainless Equipment Co., LLC entered into a distribution agreement whereby Sanchelima would serve as Walker’s exclusive distributor of dairy silos in thirteen Latin American countries, and Walker agreed not to sell directly to third parties in those countries. The contract contained a limited remedies provision capping Walker’s liability at amounts paid under purchase orders and excluding consequential damages including lost profits. After signing the agreement, Sanchelima invested in marketing Walker products in Mexico by hiring sales representatives and attending trade shows. Despite the exclusivity agreement, Walker made direct sales in the exclusive territory, including a $600,000 sale in Mexico in 2014, a $66,000 sale in Nicaragua, a nearly $3 million sale to Nestlé in Mexico in 2015, and a $160,000 sale to a Mexican juice company in 2017. When Sanchelima learned of the Nestlé sale and notified Walker of the breach, mediation failed, and Sanchelima filed suit in 2016 seeking over $600,000 in lost profits.
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