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Contracts Keyed to Templin
Schott Motorcycle Supply, Inc. v. American Honda Motor Co., Inc.
Citation:
976 F.2d 58 (1st Cir. 1992)Facts
In February 1985, Emil Schott’s sole proprietorship entered into a Sales and Service Agreement with Honda, with Emil’s son John designated as dealer manager. The Agreement expressly stated it could be modified only in writing and was personal to the dealer. In 1986, the Schott family considered dividing the business, with John taking over the Honda motorcycle dealership. Before accepting this arrangement, John allegedly met with Honda representatives Mark Pearlstein and Mike Kehne, who assured him that Honda would remain committed to the motorcycle industry and that new Honda products would increase sales enough to compensate for the loss of other product lines. Relying on these assurances, John incorporated as Schott Motorcycle Supply, Inc. and took over the Honda dealership on January 1, 1987. By August 1990, the business had failed. John claimed this failure resulted from Honda’s reduced commitment to the motorcycle industry, including failure to develop promised products and programs. In its complaint, Schott Motorcycle alleged it was a party to the 1985 Agreement, attaching the Agreement as an exhibit.
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