## Facts

- NCR and a Daisy-branded customer entered a 1976 “Universal Agreement” governing NCR’s provision of computer equipment, programs, systems, and maintenance services.
- The Universal Agreement contained a broad arbitration clause covering any controversy arising out of or related to the agreement, later contracts between NCR and the customer, and the furnishing of equipment or services.
- In 1980, an amendment to the Universal Agreement was signed on behalf of “Daisy Manufacturing Co.” by a senior finance executive who later held the same role in the successor entity.
- In 1983, Daisy Manufacturing Co., Inc. was created and acquired certain assets of the prior Daisy division; it continued the same business at the same location and retained overlapping senior management.
- In dealing with NCR, Daisy used the names “Daisy Manufacturing Co.” and “Daisy Manufacturing Co., Inc.” interchangeably and did not notify NCR of any corporate change or correct NCR’s documentation.
- Daisy later purchased a computer system from NCR using a purchase order that referenced either (a) existing customer-agreement terms or (b) printed purchase-order terms; the form provided two checkboxes for the alternatives, but neither box was checked.
- After experiencing problems with the system, Daisy sued NCR in federal court for breach of contract and related claims.
- NCR moved to compel arbitration and stay the litigation under the Federal Arbitration Act, relying primarily on the Universal Agreement’s arbitration clause; the district court denied the motion.

## Issues

1. Whether Daisy Manufacturing Co., Inc., as a successor that continued the predecessor’s business relationship with NCR without meaningful distinction, was bound by the predecessor’s Universal Agreement arbitration clause.
2. Whether the failure to check either box on the later purchase order defeated arbitration when the parties’ earlier Universal Agreement broadly covered later contracts and services.

## Decision

- The Eighth Circuit reversed the denial of NCR’s motion to compel arbitration.
- The court held that Daisy Manufacturing Co., Inc. was bound by the Universal Agreement’s arbitration clause because it effectively stood in the predecessor’s position in continuing the relationship with NCR and allowing NCR to treat it as the same customer.
- The unchecked purchase-order boxes did not negate arbitration because the Universal Agreement independently required arbitration for disputes related to later contracts and NCR’s furnishing of equipment and services.
- The case was remanded with instructions to compel arbitration and stay the court action pending arbitration.

## Legal Principles

- Under the FAA, courts must enforce valid arbitration agreements and resolve doubts about arbitrability in favor of arbitration, while still requiring an actual agreement to arbitrate.
- A broadly drafted arbitration clause can reach disputes arising from later transactions and contracts within an ongoing commercial relationship.
- A successor or continuing business entity that accepts the benefits of a predecessor’s contractual relationship and holds itself out as the same customer may be bound by the predecessor’s arbitration obligations, including arbitration provisions, based on continuity and conduct-based contract principles.

## Conclusion

The court required arbitration because Daisy’s successor entity continued the predecessor’s NCR relationship without clarifying any corporate separation and thus could not accept the relationship’s benefits while rejecting the Universal Agreement’s broad arbitration commitment; the litigation had to be stayed under the FAA.


Daisy Mfg. Co. v. NCR Corp., 29 F.3d 389 (8th Cir. 1994)