## Facts

- Clausen & Sons, Inc., a Minnesota wholesale beer distributor, alleged it had distributed Hamm’s beer since 1911.
- Clausen claimed that in 1950 it and Theo. Hamm Brewing Co. entered an oral agreement making Clausen the exclusive distributor for southern Minneapolis and nearby suburbs.
- Clausen alleged it relied on the exclusivity promise by discontinuing competing brands and investing in inventory, advertising, warehouse space, personnel, and facilities to distribute Hamm’s products.
- Clausen alleged it was to remain exclusive so long as it performed its distributorship obligations.
- In April 1963, Hamm terminated the arrangement and appointed another distributor.
- Clausen sued, asserting federal antitrust claims and a state-law breach of contract claim based on the oral exclusive distributorship.

## Issues

1. Whether the alleged oral exclusive distributorship was unenforceable and terminable at will for lack of “mutuality of obligation,” permitting summary judgment under Minnesota law.
2. Whether Clausen’s alleged reliance and performance could supply consideration, or support promissory estoppel, creating a genuine dispute that precluded summary judgment on the contract claim.

## Decision

- The Eighth Circuit reversed the district court’s grant of summary judgment on the breach of contract count and remanded with directions to reinstate that claim.
- The court held the district court erred by treating the alleged oral distributorship as necessarily terminable at will on the pleadings.
- Clausen’s allegations, if proven, could establish consideration through legal detriment (reliance and expenditures) or liability under promissory estoppel, creating genuine issues of material fact.

## Legal Principles

- Summary judgment is improper where there is any genuine dispute of material fact; it should not be granted if factual uncertainty remains on a material issue.
- Under Minnesota law, “mutuality of obligation” is not an independent requirement; the controlling question is whether there is consideration.
- Consideration may be shown by detriment incurred or a material change in position by the promisee in reliance on the promisor’s promise.
- Promissory estoppel may apply where a promise reasonably expected to induce action does induce action or forbearance, and enforcement is necessary to avoid injustice.
- Whether an alleged exclusive distributorship is terminable at will can depend on factual questions about the parties’ understanding, course of dealing, and the nature and extent of reliance.

## Conclusion

Because Clausen alleged substantial reliance and performance that could amount to consideration or promissory estoppel under Minnesota law, the enforceability and termination terms of the oral exclusive distributorship could not be resolved as a matter of law on summary judgment, requiring reinstatement of the contract claim for further proceedings.


Clausen & Sons, Inc. v. Theo. Hamm Brewing Co., 395 F.2d 388 (8th Cir. 1968)