Lockewill, Inc. v. United States Shoe Corp.

1976 8th Circuit Court of Appeals

• Williams had exclusive distributorship with United States Shoe Corp.
• No written contract as to duration or termination.
• General rule: when parties perform without duration/termination agreement, then contract is ‘at will’, thus no requirement of formal notice of cancellation.

It is a 1976 New Jersey Supreme Court case.

• Bak-A-Lum claims Alcoa has violated exclusively distributorship arrangement on aluminum siding, seeking injunction and damages.
• Understanding that Bak-A-Lum would make best efforts to sell Alcoa’s aluminum siding (standard rule under UCC).
• Alcoa kept termination of exclusive distributorship arrangement secret from Bak-A-Lum for as long as possible, so Bak-A-Lum would continue to sell as much as possible.
• Court holds that 7 months wasn’t sufficient advanced warning; 20 months would have been.

• How to distinguish Lockewill from Bak-A-Lum? ? New Jersey court, like California court, was very active in this period in changing rules.
? Difference in kind of notice given to parties in both cases
? Key part of Lockewill facts: Williams invested significantly in arrangement, but has recouped investment with eight years of selling shoes. Vs. Bak-A-Lum where plaintiff was expanding with expectation that it would still be the dealer of Alcoa products. Furthermore, Alcoa sales people urged Bak-A-Lum to stock up more.
? Difference in reliance interest on exclusive distributorship agreement in two cases.
? More evidence of bad faith on the part of Alcoa, much more ambiguity in Lockewill.

Author: international