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AMF v. McDonald’s: Difference between revisions
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The prototype was functioning sub-par; so, it constantly needed service. McDonald's was disappointed with the unit's design flaws. Logically, McDonald's asked AMF to stop production until performance standards could be leveled up. | The prototype was functioning sub-par; so, it constantly needed service. McDonald's was disappointed with the unit's design flaws. Logically, McDonald's asked AMF to stop production until performance standards could be leveled up. | ||
{{{!}} class="wikitable" | |||
{{!}}+ | |||
!Date | |||
!Event | |||
{{!}}- | |||
{{!}}Mid 1968 | |||
{{!}}McDonald's ordered 23 computerized cash registers from AMF | |||
{{!}}- | |||
{{!}}May 1969 | |||
{{!}}AMF offered assurances that only 5 registers could be ready soon | |||
{{!}}- | |||
{{!}}July 1969 | |||
{{!}}McDonald's cancelled the orders for the registers | |||
{{!}}} | |||
|procedural_history=AMF sued McDonald's for wrongful repudiation of the contract. | |procedural_history=AMF sued McDonald's for wrongful repudiation of the contract. | ||
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|holding=Yes. A party with reasonable grounds for insecurity may seek adequate assurance of the other party's performance. Failure to provide it enables the insecure party to use remedies for breach. | |holding=Yes. A party with reasonable grounds for insecurity may seek adequate assurance of the other party's performance. Failure to provide it enables the insecure party to use remedies for breach. | ||
|reasons=Under § 2-609 of the [[Contracts/Uniform Commercial Code|UCC]], a party who has reasonable grounds for insecurity can demand adequate assurance the other party will reform. | |reasons=Under § 2-609 of the [[Contracts/Uniform Commercial Code|UCC]], a party who has reasonable grounds for insecurity can demand adequate assurance the other party will reform. | ||
AMS had demonstrated no ability to meet the delivery deadline for 23 registers. | |||
|case_text_links={{Infobox Case Brief/Case Text Link | |case_text_links={{Infobox Case Brief/Case Text Link | ||
|link=https://casetext.com/case/amf-inc-v-mcdonalds-corp | |link=https://casetext.com/case/amf-inc-v-mcdonalds-corp | ||
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}} | }} | ||
}} | }} | ||
Latest revision as of 22:48, July 25, 2023
AMF v. McDonald’s | |
Court | 7th Circuit |
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Citation | 536 F.2d 1167 |
Date decided | June 22, 1976 |
Facts
In the 1960s, American Machine and Foundry ("AMF" ; AMF, Inc.) began producing computerized cash registers. For $20,000, McDonald's purchased a prototype in Illinois.
The prototype was installed in April of 1968. Later, McDonald's order 23 units. In turn, AMF promised to deliver the units by the middle of 1969.
The prototype was functioning sub-par; so, it constantly needed service. McDonald's was disappointed with the unit's design flaws. Logically, McDonald's asked AMF to stop production until performance standards could be leveled up.
Date | Event |
---|---|
Mid 1968 | McDonald's ordered 23 computerized cash registers from AMF |
May 1969 | AMF offered assurances that only 5 registers could be ready soon |
July 1969 | McDonald's cancelled the orders for the registers |
Procedural History
AMF sued McDonald's for wrongful repudiation of the contract.
McDonald's sued AMF for to recover the $20,000 it had paid for the malfunctioning prototype register.
AMF partially lost.Issues
Holding
Reasons
Under § 2-609 of the UCC, a party who has reasonable grounds for insecurity can demand adequate assurance the other party will reform.
AMS had demonstrated no ability to meet the delivery deadline for 23 registers.