Tuesday, December 3, 2013

Cloud Corp. v. Hasbro Inc. case brief

Cloud Corp. v. Hasbro Inc. case brief summary
314 F.3d 289 (2002)

Plaintiff seller appealed an order of the United States District Court for the Northern District of Illinois, Eastern Division, which entered judgment after a bench trial in favor of defendant purchaser in an action for breach of contract.

The purchaser acquired a powder made by the seller for use in a toy sold by the purchaser. Mistakenly believing that the purchaser's market was expanding, the seller manufactured a great many packets of powder in advance of receiving formal purchase orders from the purchaser. The purchaser refused to accept delivery of these excess packets or to pay for them. Contending that this refusal was a breach of contract, the seller sued the purchaser.


  • The court held that there was a valid modification of the quantity specifications in purchase orders submitted by the purchaser. 
  • Although purchase orders could not be modified without the purchaser's written consent, emails and other correspondence between the seller and the purchaser indicated that the purchaser wanted an increased quantity. 
  • The purchaser did not object within 10 days after the seller sent an acknowledgement of the oral modification. 
  • The purchaser's statute of frauds defense failed, and in any event, the seller was reasonable in believing that if the purchaser did not want to be committed to buying the additional quantity, it would so advise the seller, thereby waiving the requirement that modifications be in writing.

The court reversed the judgment for the purchaser and remanded for a calculation of the seller's damages.

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