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Contracts Keyed to Fuller
Unique Systems, Inc. v. Zotos International, Inc.
Citation:
622 F.2d 373 (8th Cir. 1980)Facts
In January 1974, Lilja (patent holder for a multistation hair-spray system) and Zotos (beauty products distributor) entered into a contract whereby Lilja would develop and manufacture hair-spray systems and Zotos would purchase 15,000 systems over two years with options for years three and four. The contract was amended in February 1974 to establish that actual stocking and distribution would commence with “month one,” defined as a “mutually agreed date in 1974.” Throughout 1974, Lilja made design changes approved by Zotos, and both parties experienced delays. By January 1975, “month one” had not been set. Lilja repeatedly indicated he was ready to set a schedule, but Zotos began expressing concerns about market softening and the system’s mechanical viability. In July 1975, Lilja demonstrated the nearly complete system, which was successful except for a minor issue. Zotos’s representatives orally agreed the system met warranty requirements but refused to put this in writing unless Lilja agreed to a market test period not required by the contract. When Zotos insisted on this condition in August 1975, Lilja considered the contract repudiated and filed suit.
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