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This case looks at whether delayed action by one party can constitute waiver of a contract term. Cases of Interest
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Wagner Excello Foods v. Fearn Intl.

Case Brief 4

Case Name: Wagner Excello Foods v. Fearn Intl.

Case Cite: 601 N.E.2d 956 (Ill. App. 1992).

Facts: A food manufacturer and a food corporation entered into a five year contract in which the manufacturer was to produce and package various fruit drinks. The contract included minimum quantity purchase requirements and provided that the price of the drinks would be reviewed quarterly. However, the corporation purchased only 19.2, 12, and 8.9 percent of the required amounts respectively during the first three years of the contract.

Procedure: Plaintiff food manufacturer appealed the judgment of the Circuit Court of Cook County in Illinois, which dismissed its breach of contract complaint against defendant food corporation.

Holding: The court affirmed the order of the circuit court, dismissing the food manufacturer's breach of contract claim against the food corporation. Waiver was established as a matter of law. However, the court remanded for further consideration of the question of fact of whether the parties intended to remove the minimum quantities requirement in the revised contract.

Reasoning: The court determined that the manufacturer waived its right to object to the noncompliance regarding the minimum quantity amount because it did not file a suit until the fourth year. It led the corporation to believe that compliance with the minimum quantity provision was not to be strictly enforced. If the manufacturer would have informed the corporation at the end of the first year that it would insist on performance of the minimum requirements, the corporation would have been in a position to cut its losses by opting out of the contract.

Future Importance: A party's right to waive a contract term cannot be held over the head of the opposing party past what the contract provides, or for longer than a reasonable period of time.

Critical Analysis: In this case, it demonstrates what can happen when a party does not act on a right contained in the contract. The manufacturers inaction led the corporation to believe that the contract term in question would not be strictly enforced. The court considered such inaction as the manufacturer waiving its minimum quantity provision thereby altering a term of the original contract.




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