This site is a developmental version of Wiki Law School. To go to the production site: www.wikilawschool.org
AMF v. McDonald’s
From wikilawschool.net. Wiki Law School does not provide legal advice. For educational purposes only.
AMF v. McDonald’s | |
Court | 7th Circuit |
---|---|
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.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
May a party seek assurance of the other party's performance if circumstances suggest that the party will fail to perform key aspects of the contract?
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.
Case Text Links
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 | ||