## Facts

- Almetals, Inc., a Michigan metals distributor, entered into a requirements-type supply contract with Wickeder Westfalenstahl GmbH, a German manufacturer of clad metal.
- Under the arrangement, Wickeder supplied clad metal that Almetals processed and resold to customers in North America, including automotive supply-chain customers.
- The clad metal at issue was effectively unavailable from other sources; Wickeder was the only known manufacturer able to produce the particular product Almetals’ customers required, making cover impracticable.
- The parties’ written agreement (dated April 1, 2000) contemplated a seven-year term, with cancellation after the seven-year period by written notice.
- The contract included a “Customer Order and Protection Clause” recognizing the long development cycle and long life of North American programs, and providing that if the agreement terminated, Wickeder would continue for ten years to honor existing commitments to supply orders and complete programs in development for North America.
- After the seven-year period ended, Wickeder treated the contract as terminated for new business, while acknowledging continuing duties for existing customer programs under the customer-protection clause.
- A dispute arose over payment terms for post-termination shipments on protected orders/programs. Wickeder insisted it could require cash-on-delivery (COD), rather than the parties’ established 60-day payment structure (as reflected in the parties’ dealings for the protected business, including a 60-days-from-invoice approach tied to a small price concession).
- Almetals asserted COD would disrupt its ability to service just-in-time automotive programs and threaten customer relationships built around long-running applications of Wickeder’s unique product.
- Almetals sued for breach of contract and sought injunctive relief to prevent Wickeder from imposing COD. The district court issued a temporary restraining order maintaining the status quo while the case proceeded.
- On summary judgment and then after a bench trial limited to equitable relief, the court considered whether Wickeder’s COD demand violated the parties’ continuing contractual obligations and whether specific performance and a permanent injunction were warranted.

## Issues

1. Did the contract’s ten-year Customer Order and Protection Clause extend the parties’ essential deal terms (including the operative payment structure) to post-termination performance on protected orders and programs?
2. Did Wickeder breach the contract by unilaterally attempting to impose COD payment terms on shipments required under the customer-protection clause?
3. Were specific performance under U.C.C. § 2-716 and a permanent injunction appropriate remedies given the uniqueness of the goods and the threatened harm from a supply interruption or forced COD terms?

## Decision

- The court held that the Customer Order and Protection Clause was enforceable and required Wickeder to continue supplying Almetals for protected orders/programs during the ten-year period on the essential terms governing that relationship.
- The court declared that Wickeder’s attempt to require COD on protected business violated the contract.
- The court granted relief in Almetals’ favor, including a permanent injunction requiring Wickeder to perform for the duration of the customer-protection period under the adjudicated payment structure (60 days after invoice, tied to a modest price concession) rather than COD.
- The court found legal remedies inadequate in light of the product’s uniqueness, the lack of realistic cover, and the risk of harm to ongoing customer programs and relationships.

## Legal Principles

- A post-termination customer/order protection clause may continue the supplier’s duty to perform for existing orders and programs, and may carry forward the essential commercial terms needed to make that continued performance workable.
- A seller may not unilaterally impose materially different payment terms (such as COD) when the parties’ agreement and course of dealing require continued supply on established credit terms for covered business.
- Under U.C.C. § 2-716, specific performance may be ordered where goods are unique or where circumstances make cover impracticable and damages inadequate.
- Permanent injunctive relief may issue where the buyer shows irreparable harm, inadequacy of money damages, a balance of hardships favoring relief, and consistency with the public interest in enforcing commercial agreements.

## Conclusion

Almetals held a continuing right, under the contract’s ten-year customer-protection clause, to receive Wickeder’s unique clad metal for protected orders and programs on the relationship’s essential terms, including the operative 60-day payment structure; Wickeder’s COD demand breached that obligation, and the court entered declaratory relief and a permanent injunction requiring continued supply without COD for the protection period.


Almetals, Inc. v. Wickeder Westfalenstahl, GmbH, 67 UCC Rep. Serv. 2d 562 (2008)