*2 POSNER, Before FLAUM and KANNE, Judges. Circuit POSNER, Circuit Judge. appeal
This in a diversity contract case presents a fundamental question surpris- — ingly little discussed either courts or commentators—in the law contracts. Is such a contract essentially a buyer's option, entitling purchase him to he needs question terms set forth in the leaving him free purchase none he wishes senting profits on purchase the lost he does provided (the jury’s estimate of Bak- acting units anyone else and good from propane requirements) and eries’ the seller? ill will toward out of would have fuel that the converted vehicles retail dis- is a Corporation Empire Gas during period. consumed gas, better liquefied petroleum tributor $581,916 prejudgment inter- judge added sells convert- It also “propane.” known *3 est. motor ve- gasoline-powered enable ers that sharp propane. operate on hicles argument Bakeries’ first American and 1980 prices gasoline rise entitled to a directed verdict is that it was Company, which American Bakeries made the evidence showed 3,000 motor than fleet of more operated con possibly have tendered Gas could not plants and processing serve its vehicles signing the forming goods. Shortly before of possibility bakeries, in the interested Bakeries, Empire American contract with which was propane, converting its fleet to a Dutch- signed had a contract Gas expensive less to one-half one-third now Bé, unit, and it the Bé & made conversion Discussions between gasoline. than negotiat the unit to its brought samples of agreement prin- in an companies resulted American Bakeries ing with sessions American Bakeries sent Empire Gas ciple. describ literature gave American Bakeries Fuel “Guaranteed of its standard a draft only unit the This was the ing the unit. re- Contract,” have which Supply flop, and even It was a parties discussed. install a mini- Bakeries to quired American Customs asked the U.S. tually Empire Gas of units each number conversion mum waste or reclassify it as either Service propane for the buy all the and to month argues that the Bakeries scrap. American Empire Gas for vehicles from converted was a signed Gas it contract rejected Bakeries eight years. American unit, Bé the Bé & purchase contract prepared Empire Gas contract and sup not have Empire Gas could hence that 17, April one, executed which was new if American conforming goods even plied approximately 1980, was “for and which alleged con out its carried Bakeries had units, (3,000) thousand [conversion] three in full. commitments tractual depending upon less more or 2- on sections relies Bakeries American Tank, consisting Fuel Fuel Buyer, (c) Commercial the Uniform 313(l)(b) Switch, appropriate & Converter Lock Off law, the in Illinois—whose (adopted Code Kit,” price at a & Small Farts Carburetor is- governs the substantive agree, parties American Bakeries per unit. of $750 ch. Ill.Rev.Stat. case—as this sues fuel propane motor agreed purchase “to provides 11112-313(l)(b),(c)). The former CORPORA- GAS solely from EMPIRE which is goods of the description “any EMPIRE where GAS at all locations TION bargain the basis part made dispensing supplied carburetion has goods warranty that the express an creates long EMPIRE GAS COR- equipment as the latter description,” to the shall conform reasonably in a com- remains PORATION is made model sample or “any sup- major posture with other petitive price creates bargain basis part last for four was to pliers.” The contract the whole warranty that express years. mod- sample or to the conform goods shall never ordered Bakeries (identical provi- in both As clause el.” Empire Gas. equipment propane or suggests— italicized sions) that we signing days after Apparently within & Sum- clearly, as White too though none Bakeries decided the contract American Under mers, of the Law Handbook No propane. reason its fleet to to convert (2d ed. 332-35 Code Uniform Commercial given decision. for the sample 1980), description points out—the conforming tender obligation of creates an brought against Ameri- suit Gas contract intended to only of contract and can Bakeries breach or sam- description specific $3,254,963, repre- reference to verdict won pie. It necessary thus is to determine The heart of this case is the instruction whether the Bé Bé& thing was the concerning American Bakeries’ obligation parties intended to contract for or was under the contract. If there legal were no merely illustrative, descriptive, or sugges- category of “requirements” contracts and tive. See UCC 6; comment § provision of the Uniform Commercial Hawkland (Art. UCC Series 2-p. 2-313:06 § Code governing contracts, such strong 304) (1987). Ordinarily, here, argument could be made that American jury question. was is a See Alan Wood agreed Bakeries to buy Capital Steel Co. v. Equipment Enter- units or slightly more slightly less, de- prises, Inc., Ill.App.3d 48, 56-57, 349 pending on needs, its actual and hence that (1976). N.E.2d 632-33 it broke the contract taking none. This The contract does not only mention Bé a semantically permissible read- unit, Bé as American ing Bakeries could have of the supported one do; demanded that it and as the contract the discussions *4 parties that the had before contains a parol-evidence standard clause the signed (and contract was these discus- (“This Agreement comprises the entire sions are admissible explain to though not Agreement, and there agreements, are no change parties’ to the undertakings), understandings, conditions, or warranties which American Bakeries Empire assured representation[s], written, oral or express Gas that it planning was to convert its implied, or concerning subject the matter entire fleet. American Bakeries insisted on or in consideration hereof which are not adding phrase the “more or less depending merged herein”), the discussions between requirements upon Buyer” just in case the concerning the Bé & Bé unit 3,000 its estimate of off, this and is cannot be meaning used alter the quite different supposing that the Anyway contract. it is unlikely that Amer- phrase was added so that American Baker- ican Bakeries cared what the brand was. ies would obligation no have What did it know about conversion units? units at all. Empire Gas expert was the on propane The parties agree, however, that despite technology; all American Bakeries would negotiating the history and the inclusion in have cared about was that Gas specific contract of a quan- estimate of supply a unit that worked. Gas tity, quoted phrase sorted the contract thought at the time that this would legal into the bin “requirements labeled unit, Bé & Bé it changed but later its mind. thereby contract” brought and it under the Empire Gas does not manufacture conver- governance 2-306(1) section Uni- equipment, sion supplies it essentially Code, form provides: Commercial as an accommodation to the customers for A term which the quantity by measures its propane, major part of its business. output of the seller or the require- (The lion’s share of the damages awarded buyer ments of the means such actual jury was for profits lost on the sale output as may occur in of propane.) It would have been ridiculous good faith, except no quantity that un- for Empire Gas to sacrifice the contract’s reasonably disproportionate to any stated major objective by supplying con- unusable estimate inor the absence of a stated equipment; conversion, version no sales to any estimate normal or otherwise com- of propane. Knowing this, American Bak- parable prior output eries presumably was content let may be tendered or demanded. Gas decide what unit supply. conversion objection So Over American Bakeries’ least a jury reasonable con- could judge decided to read clude. It statute to the could also conclude that Empire Gas, jury verbatim and amplification, without had inventory extensive remarking lawyers, equipment to the manufactured dif- companies, ferent could and Now, would have I nothing have to do with fact found satisfactory equipment to supply that there be some ambiguity in American Bakeries. If ambiguity, well, 2-306. there is legal drafting; anyway are common in is the law This too bad. is has its share due re- Commercial Code With Uniform adopted. legislature Wisconsin ambiguities, see great judges these spect Knife Crofters, Metal has cited Works National Bakeries’ counsel] [American lawyers (7th Cir.1986). he has great academic F.2d these well, attention, good, they my called distinguish not between does these mull over lot of time have a demands more than who problems. de- and the who stated estimate telling this problem of I have But less, literally it therefore read mands right is, and the law law what the jury (much) less to take forbid statute, I here, here this right judge estimate. Since the than the stated jury’s faith this deal of attempt interpret statute, did facts to the this statute apply ability to literally, if so the may have read jury this case. for Em- a verdict judge in effect directed jury law what that the is not true It Gas. The stated estimate pire language. statutory out might make none; units; took American Bakeries interpreted. as is the statute The law unreasonably disproportion- if this was judge’s. Hav- is the interpretation duty of estimate, what to the stated ate then he must interpreted the statute ing shortfall could be? meaning, interpret- convey the statute’s pro whether the decide So we must If can ed, understand. in words *5 buy the literally when should be read viso something different 2-306 means section more than demanding less rather than iser say, the instruction to from what seems no cases There are stated estimate. the was erroneous. Illinois, authority else question the the question involves interpretive The (one considering how often sparse, is where unreason dealing “quantity proviso arisen. think) question must have the might any esti to stated ably disproportionate is not to approach clearly the dominant But fairly easy to is mate.” This limitation literally, instead proviso construe the takes disproportion when the understand overdemanding underde the to treat demanding more of the the form See, e.g., differently. manding cases If were there the amount than estimated. v. Ponde Group, Inc. Angelica Uniform be price happened to ceiling, and if (8th Inc., 232 Cir. F.2d Systems, 636 rosa in might buyer, he advantageous to the R.A. law); (Missouri curiam) 1980) (per he could “requirements” so that crease his Associates, Asphalt v. Con Inc. & Weaver See, e.g., profit. good at a resell (D.C. 1315, 1322 struction, Inc., 587 F.2d Co., 105 869, 872 v. C. Crane Fed. Crane law); Lam Cir.1978) (District of Columbia Requirements Weistart, Cir.1901); (7th (7th 132, 138 Evans, F.2d v. 575 Corp. bert Quantity Varia Output Contracts: Corp. v. HML law); Cir.1978) (Wisconsin 599, UCC, L.J. 1973 Duke tions Under 77, n. 5 Corp., 365 F.2d 81 Foods General International, Inc. v. 640-41; cf. Utah law); (New Cir.1966) York (dictum) (3d Inc., Ass’n, 425 Electric Colorado-Ute Co. v. Service Public Indiana Northern (D.Colo.1976). This 1100-01 F.Supp. Inc., Westmoreland, F.Supp. Colorado competition with place him in would law); (Indiana (N.D.Ind.1987) 613, 636 not have parties result seller—a Contracts, “More Note, Requirements So signed the contract. they when wanted Less,” Commercial Under the provi Uniform “unreasonably disproportionate” 105, 120-21 Code, L.Rev. Rutgers par likely intent of so out the carries Note, Requirements Contracts: (1980); the same only problem is that ties. The Construction, Drafting Problems interpre easily be reached result could (1965). We 1212, 1220 Harv.L.Rev. “good faith” of the tation words that it also note We right. this is 2-306(1), think thus of section preceding clause seller “the approach: law the common redun But making redundant. varia- good faith of all the risk emphasize assumes clarify or designed dancies to buyer’s requirements buyer tions in the to even takes less require- than his estimated ments, course, liquidate provided, extent of determination to he does not anyone Corp. else. We discontinue business.” HML conclude that Illinois courts would Corp., supra, 365 F.2d allow to General Foods reduce his 81; zero he was Wayne Corrugated see also Fort Pa- faith, acting though even the con- per Hocking Corp., Co. v. Anchor Glass tract contained an estimate (3d of those re- Cir.1942). 130 F.2d quirements. Granted, language in there is the Official This conclusion would greatly (not Illinois, Comments official be it not- so, strengthened—too much as we shall ed) points symmetrical treatment only purpose see—if the of a overdemanding underdemanding of the give contract were to the seller a reason- agreed cases: “the estimate is to be re- ably product assured market for his garded as center par- around which the forbidding satisfy any ties intend the variation occur.” UCC by buying supplier. needs another 2-306, comment 3. But there is no elabo- § (An output also dealt in sec- ration; and the is in statement tension with 2-306(1), gives tion reasonably “good the statement in comment 2 that supply by assured source of forbidding the prior requirements faith variations from any output any seller sell of his other permitted are even when the variation buyer.) buyer’s undertaking to deal discontinuance,” be such as to result particular exclusively gives awith seller principle general, why if that sound some, although the seller far from com- just should it cease to be sound plete, having assurance of a market for his included an estimate goods; compensate and of course he must requirements? tinyA point against verbal giving up opportunity symmetrical interpretation the last shop compet- around for a deal from better proviso—“demanded.” word of the ing sellers. quantity unreasonably statement that “no obligation, There was no breach of this disproportionate ... stated estimate *6 or, most, (American at a trivial one. Bak- may be naturally ... demanded” is more pro- eries did convert of its vehicles to read applying to the case where the pane, using equipment bought from anoth- buyer is demanding more than is when he er company; the record is silent on but how reducing his demand below the usual or many, any, purchases if of these occurred estimated level. while the contract in with Gas was important More than this verbal force.) obligation just If the were not skirmishing is the provi fact that the entire competitor’s buying goods refrain from a given so is in a sense redundant the words buy approximately esti- but to the stated “good faith” in the main clause of the (or, estimate, in the mate absence of proviso statute. The thus seems requirements), the “normal” the designed to explicate “good the term altogether contract would be more burden- faith” rather than indepen an establish buyer. just some to the Instead of commit- legal dent aspect of standard. And the ting himself from competitor not to a good faith required explication that had competitor even if the a offered better only disproportionately to do large sale, product or terms of he would be com- buyer demands. If the an opportunity saw through mitting go himself with whatev- profits to increase by reselling his the sell generated re- project er the estimate of goods er’s price because the market had quantity, quired happened no matter what risen the price, exploita above contract project ex- over the life save those might tion of that opportunity clearly ceptional per- that events would excuse faith; spell proviso bad was added to under formance the related excuses opportunity. close off the There is no indi majeure, impossibility, impracticabili- force cation that equally, ty, big the draftsmen were or frustration. This would be a all, at concerned about the case in where commitment to infer the inclusion reason. There is no quantity, estimated evidence contract an the record they why changed concede as do on beyond vague once the its mind least require- really is a that, that their contract references to “budget problems” here so for not a contract and contract appears, ments far as nothing have been words, itself—not, a other estimate euphemism more than a a for decision fixed-quantity contract. Bakeries not to funds allocate for to propane. interpretations—that
Both extreme
dealing
buyer
only
need
refrain
given
If no
reason at
need be
seller,
competitor
scaling
requirements
back one’s
even
significantly
buyer
go
cannot
beneath
zero,
requirements
then
contract is from
except in
circum-
quantity
dire
estimated
standpoint
just
option
shall
rejected, as we
see.
stances—must be
(or
purchase up
i.e.,
slightly beyond,
judge should not have
Nevertheless the
proportion
within the limits
reasonable
“unreasonably disproportionate”
read
ality)
spec
the stated estimate on the terms
2-306(1)
proviso
jury.
to the
in section
except
ified
require-
apply, though the
does not
option
cannot refuse to
exercise
be
does,
good
where the
ment of
faith
him
cause someone offers
better terms.
more of the stated
takes less rather than
position,
is
This
not an unreasonable
but it
ain
contract.
estimate
Among
important
is not
less
the law.
requires
error in instructions
rever-
This
option
reasons for this conclusion are that
liability
a new trial on
unless it
sal and
are dealt with elsewhere in the
contracts
American Bakeries acted
clear either that
Code,
2-311,
section
and that the Offi
see
faith,
faith or
it acted
“a
cial Comments to section 306 state that
requires
to take
since the statute
requirements buyer
shut-down
“good
requirements from
faith”
might
permissible
lack of
where
orders
seller, irrespective
proportionality. The
merely to curtail
losses would
a shut-down
Uniform Commercial Code does not contain
2-306,
(emphasis
not.”
comment
UCC §
“good
a definition of
faith” that seems
added).
compelling is
Illinois
More
require-
applicable to' the
under a
to section
Code Comment
2-104(1)
Compare
ments contract.
section
a cod
states that “this section ...
2-103(l)(b).
with section
Nor has the term
law,”
prior
ification of
Illinois decisional
meaning
generally;
a settled
in law
it is a
made
that a
which had
clear
See, e.g.,
Serhant,
chameleon.
Bosco
buyer’s option.
more
than
(7th Cir.1987);
836 F.2d
re
In
TCI
original agreement, appellant was
“By the
Ltd.,
Cir.1985).
(7th
769 F.2d
coal
order all the
entitled to
acting
Clearly,
American Bakeries was
*7
the
in
for
required or needed
its business
if during
period
bad faith
it
contract
contract,
named; by
modified
season
bought propane
any-
from
conversion units
privilege
appellant
restricted to
was
Gas, made
one other than
its
tons.
not
ordering
thousand
It was
twelve
units, or
purchases
own
reduced its
be-
for the mere
here to contract
the intention
(for
cause it wanted to hurt
Gas
fu
buying coal at a
option
privilege of
example
they
competitors
because
were
time,
quantity
simply to limit the
ture
but
market).
clearly,
Equally
some other
it
not
to
bought....
was
intended
to be
acting
[I]t
was not
in bad faith
it had a
Lum
option
an
contract.” Minnesota
be
deciding
business reason for
not to convert
Co., 160 Ill.
ber
v.
Coal
Co. Whitebreast
independent
that was
of the terms of the
(1896).
85, 96-97,
“Require
N.E. 774
43
aspect
or any
contract
other
of its relation-
purely subjective
more than
ments” are
Empire Gas,
drop in
ship with
such
aas
equivalent
“needs,”
which would be
products
bakery
demand for its
it
led
v.
Co.
See National Furnace
“wants.”
delivery
to reduce or
its fleet of
abandon
427, 433-34
Co., 110 Ill.
Keystone Mfg.
question
trucks. A harder
is whether it
(1884).
v. Bledsoe
acting
changed
& Williams
faith if
its
Chalmers
it
(1920),
a
Co.,
held that
(disclosed)
Ill.App. 363
mind about
for
218
conversion
no
1340
to
coal to
decision
switch from
elec
some other investment than
obligation
tricity did
excuse it
its
propane.
not
purchase
“consumption require
its
general
try
distinction that we are
ments”
coal from seller. That was a
ing to make is
by
well illustrated
South
stronger
case
than the west Natural Gas Co. v. Oklahoma Port
one,
present
did make
a
Co.,
(10th
land Cement
sion units The propane and for essential trucks that it of, got rid Empire buyer’s reducing but neither faith in the case of the did Gas agree forgo requirements merely sales estimated he not because new that management merely thoughts at American had Bakeries decided have second about the capital that its get would employed be better in terms of the contract and want to out
1341 through process. with the conversion Af- Concrete Products it. See Wilsonville 345, 352, in, Co., Or. Building this evidence came ter American Baker- v. Todd (1978); Box Royal Paper ies could avoid a directed only by P.2d verdict Co., 290 Mass. Apt introducing E.R. Shoe concerning v. some evidence Co. its (1935); Wayne Corrugat- Fort reducing requirements. 195 N.E. its reasons It Glass Paper Hocking Anchor Co. v. evidence, ed only not introduced no but as is 473-74; at supra, 130 F.2d White Corp., plain argument from counsel’s remarks at Summers, 126. at Whether supra, put has no evidence that it would it care unclear, obligation any greater has jury—no reasons that before it would need not be decided at but see id. share either the care to district court have) (as a we that Once it is decided here. disagrees court. or this It the stan- arbitrarily his re- cannot declare faith, good believing long that dard of so zero, this becomes quirements to be it did not conversion units elsewhere or case, American Bakeries easy because hurt Empire Gas it was free to want change of given any reason its never requirements its reduce as much as it might once the district It seem that heart. suggest It pleased. does not that it has jury in the decided to instruct judge adopted, we case under standard statute, Baker- language of the American requires minimum the re- at a that arguing that it had foreclosed ies was requirements mo- duction have been faith; in down its scaled solely by a reassessment of the tivated propor- to zero could never be a reduction advantages disadvantages balance if, implied, the as the instruction tionate buyer. the contract to under applies reduc- disproportion on in as well as increases tions Next, argues American Bakeries takings. judge But did not make this trial that it is entitled to new until instructions conference. decision judge’s to allow the introduc refusal every then American Bakeries had Until Empire had in of evidence that Gas tion evi- opportunity and incentive to introduce willfully provide failed to pretrial discovery why its dence of it decided to convert its belief that the documents revealed none, propane. fleet to It introduced judge junk. Bé Bé & units were in coun- argument even at the this court its probative value of this evi thought give change of sel could no reason for the outweighed by prob its substantially dence to a beyond heart a hint that it due Fed. jury, see prejudicial effect able change management, in which would not be right, only be he was R.Evid. 403—and enough by justify change in the itself to at best cumulative the evidence was cause buyer’s requirements. There was probably irrelevant. though junk; Bé unit was question Even Gas had & Bé proving the contract only question burden of breach whether (we assume) proving American Bakeries therefore have entitled unit, ques in accept acted faith Bakeries a substitute refuse reducing question con are its the documents tion to which (see Corp. units zero version HML and to if at all barely relevant at Corp., supra, 365 F.2d clearly General Foods no. seems answer event 83; International, see Inc. v. Utah finding liability must jury’s Inc., Ass’n, su Colorado-Ute Electrical stand; assess error but was there 1100), pra, F.Supp. no reasonable ob damages? American Bakeries ment of faith, could to find bad jury have failed assumption made violently to the jects instructing therefore the error the ve-. expert Gas’s witness proportionality was harmless. Bakeries, had converted American evidence, hides incon put Gas uncontested and were Empire Gas contends honored what testable, showing that American Bakeries *9 contract, would obligations did its under got had not its fleet of trucks and rid of propane. 100 on go percent run the financial wherewithal have have 1342
conversion units would have dual breach been in relaxed line with the units, permit general giving which the driver a flick of winning plain- trend toward something engine in on tiffs compensation a switch run his vehicle closer to full See, propane. injuries. gasoline e.g., either or But since the their Export Afram Corp. v. agree price propane Metallurgiki S.A., of Halyps, 772 1358, (7th Cir.1985). F.2d gasoline throughout of 1370-71 lower than that But trend has period, point allowing not reached the of entire contract a driver have prejudgment in interest a case like this. gasoline his conversion switched unit to breach, right up At the time of and indeed only propane when he low on and too verdict, the jury’s entirely it was unclear away propane far station to reach it been, what Gas’s loss had since big he ran out. This factor was not before depended only not precise ex- enough expert upset witness’s calcu- tent of American Bakeries’ significantly. lations of The calculation margins on profit Gas’s damages is rather than mea- estimation converting See, e.g., units propane. surement, prolong it is foolish to Illinois, Cushman & Inc. v. quest precision. in of lawsuit delusive Wakefield of Partnership, Northbrook 500 Limited 112 complaints damage The other about the 951, 963, 460, 468, Ill.App.3d Ill.Dec. 445 equally inconsequential, assessment are 1313, (1983). N.E.2d require great and do not A discussion. judgment except The. is affirmed for the of weakness American Bakeries’ case was prejudgment award of interest. present its failure to its of own estimate damages, in jury the absence of which Modified and AffiRmed. adjustments idea could have no of what KANNE, make in order to Judge, dissenting: take account of American Circuit arguments. Bakeries’ American Bakeries I agree majority with the that the error put have feared that if it in its own giving regarding in the instruction the “un damages estimate of would be reasonably disproportionate” in Illi irresistibly figure attracted to that aas 2-306(1) nois’ Uniform Commercial Code § compromise. so, But if American Bakeries requires trial, reversal new “unless gambled were; nothing, double or as it is clear either that American Bakeries act we consequences will relieve it of the good ed in in faith or that it acted strategy. risky its problem faith....” The fundamental good there was evidence either judge But think we erred normally or bad faith as those terms are awarding prejudgment interest. The Illi defined.1 For different reasons neither nois statute allows such interest to be produc Gas nor American Bakeries percent awarded the rate of “for five honesty ed evidence of American Bakeries’ moneys they any after due on become ... dishonesty dealing or fair unfair writing.” instrument of ch. Ill.Rev.Stat. regard to its reduction of its ¶ 17, Traditionally, 6402. such statutes to zero. construed, narrowly were consistent with a long history confining pre Holland, the award As in Massey-Ferguson, Inc. v. judgment interest 142, 146, to cases Ill.App.3d where ex 61 Ill.Dec. tent of the contract liability (1982), breaker’s was N.E.2d the material “... breach, clear at the time he testimony any so that could this case did reveal stopped running lies, deceit, just overreaching of interest examples or other by depositing the amount in court. In re dishonesty fact transaction ... years requirement cent regarding that the dam nor was evidence adduced ages readily ascertainable at the time reasonable commercial standards fair 1-201(19) applies good 1. Section "honesty to all sections faith as in fact and the observ- "honesty of the code defines faith as ance of reasonable commercial standards of fair fact in the conduct or transaction concerned.” dealing in the trade.” sales, applies Section defines *10 2-306—evidence of a buyer’s good § Massey-Fergu- In bad trade.” dealing in the faith is also necessary. found that son, Appellate Court the Illinois specific failure to introduce plaintiffs standard, It is not this practical but its fail- constituted a as to bad faith evidence application to the case, trial of this proof of on the carry its burden ure to causes me part company my breth- faith. issue of bad ren. us as case in the before majority The If, majority as the apparently holds—the the burden Empire Gas bears that sumes seller has proof the burden of on the issue American Bakeries’ of on the issue proof of buyer’s of the bad faith—I would reverse presumes then majority The faith. bad and remand for new trial showing of this burden meets Gas did not bear that burden and the trial evidence simply presenting by faith bad record discloses no ordinarily facts found got rid had not Bakeries “American necessary by prove Illinois courts to bad financial have the did trucks and fleet of its faith. through the conver go wherewithal If, on hand, the other the majority actual- this scant agree that from I do sion.” ly (again holds correctly believe) I buy- could have —a jury reasonable “no evidence er’s assertion of an unreasonably dispro- faith,” the dis and thus to find bad failed portionate reduction in requirements instruct court’s failure trict creates a presumption bad faith not harmless issue was on this properly be rebutted proof good trial, Empire Gas reality, In error. faith —I would also reverse and remand for carry alone required to shoulder—let never a new trial because this new rebuttable faith.2 proof on bad —any actual burden presumption of faith bad was not Illi- seller’s thus transforms majority nois rule under which the trial was con- faith proof on bad burden theoretical ducted. actual jury) into an (unarticulated to the (artic faith presumption post-trial).
ulated test, to the Gas, actually put evi- produce may not be able
may or Likewise, do not we
dence of bad faith. Bakeries would be whether know America, UNITED STATES good support a produce evidence able Plaintiff-Appellee, majori- to zero. Absent faith reduction knew, at no one presumption, at trial ty’s HOLZER, Reginald evidence, it had J. least based Defendant-Appellant. go American Bakeries’ burden become good faith. proof of its forward with 86-1879. No. Clearly American Bakeries’ reduction of Appeals, States Court United requirements
its for conversion units Seventh Circuit. “unreasonably dispropor- to zero was 8, 1988. Argued Jan. However, tionate” on its face. the court (correctly believe) I today holds that what Decided Feb. 1988.* unreasonably appears buyers’ to be a dis- reduction proportionate liability under enough determine actually rejected
2. The district court stated in a the instruc- Even if an estimate is tion tendered goods American Bakeries which ar- buyer need not order more Empire’s proof regarding ticulated burden of good faith determines it re- than the bad faith. American Bakeries’ tendered Instruc- good quires. re- even if such faith This is so pertinent tion part No. 19 reads in as follows: previ- substantially quirements are less than ously has no estimate or even if the stated must exercise faith in deter- requirements at all. mining requirements. its Good faith means proving that the The seller has the burden honesty in fact in the conduct or transaction requirements in bad faith. has set its concerned.