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All-Tech Telecom v. Amway: Difference between revisions
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Latest revision as of 17:16, July 21, 2023
All-Tech Telecom v. Amway | |
Court | 7th Circuit |
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Citation | |
Date decided | April 7, 1999 |
Facts
In 1987, Amway created TeleCharge, a new long distance phone. TeleCharge was geared toward hotel & restaurant guests.
Customers would use a credit card or calling card to make long-distance call on a TeleCharge; the charges were divided between the (1) hotel or restaurant, (2) the phone distributor, & (3) the phone company.
Away hyped up TeleCharge as the best phone system in the country.
In 1988, All-Tech was created to distribute the TeleCharge phone. Amway told distributors that each TeleCharge phone could generate $750 in profits.
Over the next few years, there were numerous problems with TeleCharge phones such as regulatory hurdles.
By 1992, the TeleCharge phones had become obsolete.Procedural History
All-Tech Telecom, Inc. ("All-Tech") sued Amway for breach of warranty, intentional & negligent mis-representation, and promissory estoppel.
Amway won summary judgment on the claims of misrepresentation & promissory estoppel.
The jury found a breach of warranty; however, All-Tech wasn't awarded any money damages.Issues
Holding
Yes. The Economic-Loss Doctrine (ELD) prevents a party from seeking duplicate remedies for contract claims.
This case is a purely contract claim.Reasons
Rule
A promise is about the future. A promissory estoppel applies to when a promise can't be enforced under contract law principles.
A warranty is about the past. This is protected by contract law.