Wednesday, December 25, 2013

AM/PM Franchise Assn. v. Atlantic Richfield Co. case brief

AM/PM Franchise Assn. v. Atlantic Richfield Co. case brief summary
584 A.2d 915 (1990)

Plaintiff mini mart owners appealed from an order of the Superior Court of Pennsylvania affirming a lower court order that sustained defendant gasoline supplier's preliminary objections in the nature of a demurrer and dismissed their action for damages resulting from breach of warranty.


  • The court found that plaintiff mini-mart owners had alleged sufficient facts to sustain a cause of action when they averred that the gasoline they purchased from defendant gasoline supplier under an exclusive contract was not in conformance with the warranties made and resulted in their suffering economic losses. 
  • Therefore the court reversed the superior court decision that had affirmed a lower court order dismissing the suit on defendant's demurrer. 
  • The court held that there were three types of lost profits recoverable as consequential damages pursuant to 13 Pa. Cons. Stat. §§ 2714, 2715 of the Uniform Commercial Code: 
  • (1) loss of primary profits, 
  • (2) loss of secondary profits, and 
  • (3) good will damages, which represented a new direction for the court. 
  • The court reversed and remanded the decisions of the lower courts as to the breach of warranty claims and otherwise affirmed.
As plaintiff mini mart owners stated a cause of action in their U.C.C. breach of warranty suit for damages against defendant gasoline supplier for nonconforming gasoline, the court reversed and remanded the order of the superior court affirming dismissal of plaintiff's suit but otherwise affirmed.

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