## Facts

- Farm Equipment Store, Inc. was an authorized dealer of farm machinery and repair parts.
- White Farm Equipment Company manufactured farm equipment and distributed through dealers, including Farm Equipment, until White Farm entered bankruptcy in 1985.
- Allied Products Corporation acquired certain White Farm assets in bankruptcy, including product lines and marketing rights, free of any obligations White Farm owed its dealers.
- In February 1986, Farm Equipment and Allied entered a new written dealer agreement effective until termination in June 1988.
- The agreement contained (1) an annual repair-parts return-for-credit provision and (2) a termination repurchase provision; these provisions applied to parts purchased from/manufactured by Allied, not parts manufactured by White Farm.
- Farm Equipment claimed Allied’s practice of accepting returns of both Allied-made and White Farm-made parts modified the written agreement through course of dealing/performance.
- On June 14, 1988, Allied terminated the dealer agreement without notice.
- After termination, Allied accepted roughly $40,000 in parts Farm Equipment returned that had been purchased from Allied.
- Farm Equipment sought to return an additional inventory valued at about $210,000, largely consisting of parts purchased from White Farm; Allied refused.
- Farm Equipment sued and later amended its complaint to allege the contract had been modified by course of dealing to require Allied to accept returns of White Farm-purchased parts.
- The trial court granted partial summary judgment to Allied on the modification claim, and Farm Equipment appealed.

## Issues

1. Whether course of dealing or course of performance modified a written dealer agreement—despite a written-modification clause—to require Allied to repurchase repair parts the dealer had purchased from Allied’s predecessor (White Farm) upon termination.

## Decision

- The Indiana Court of Appeals affirmed partial summary judgment for Allied.
- The court held there was no contract modification obligating Allied to accept returns of parts purchased from White Farm.
- The court concluded Allied was entitled to judgment as a matter of law because there was no genuine issue of material fact on modification.

## Legal Principles

- A contract provision requiring modifications to be in writing bars enforcement of alleged unwritten modifications absent a qualifying written change.
- Under UCC principles, course of dealing and course of performance may explain or supplement an agreement but cannot contradict clear, unambiguous express terms.
- When assets are acquired in bankruptcy “free and clear” of prior dealer obligations, any repurchase duty must arise from the purchaser’s own contract, not from the predecessor’s dealer relationship.
- Summary judgment is proper when designated evidence shows no genuine issue of material fact and the movant is entitled to judgment as a matter of law.

## Conclusion

The court enforced the written dealer agreement’s limits and its written-modification requirement, holding that alleged prior practices could not expand Allied’s termination repurchase duty to cover parts purchased from a bankrupt predecessor whose obligations were not assumed in the asset purchase.


Farm Equip. Store, Inc. v. White Farm Equip. Co., 596 N.E.2d 274 (Ind. Ct. App. 1992)