## Facts

- A radiator dealer/installer and a manufacturer entered a written executory contract under which the seller would furnish the buyer with the buyer’s “entire radiator needs for the year 1899” at stated prices.
- The contract stated no fixed quantity; it functioned as a requirements contract tied to the buyer’s needs during 1899.
- After iron prices rose, the seller filled orders up to about 48,000 feet of radiation, roughly the buyer’s highest prior annual requirement, and then refused to fill additional orders.
- The buyer continued ordering amounts that would have totaled roughly 100,000 feet for the year; the seller rejected the orders above what it considered the “usual” quantity.
- The seller asserted the contract should be limited to quantities comparable to prior years and pleaded mutual mistake, seeking reformation to add that limit.
- The trial court rejected the mutual-mistake/reformation defense, admitted evidence concerning the buyer’s business and needs, and awarded the buyer substantial damages for breach.
- The Appellate Division affirmed, and the seller appealed.

## Issues

1. Whether an “entire needs” requirements contract with no numerical quantity term should be construed (or reformed for mutual mistake) to impose an implied cap based on prior years’ quantities.
2. Whether the buyer’s increased orders were outside the contract because requirements contracts are limited by good faith and reasonable business needs.
3. Whether testimony describing the buyer’s business operations and radiator needs was admissible as factual proof of requirements.

## Decision

- The Court of Appeals affirmed the judgment for the buyer.
- The contract was intentionally open as to quantity and obligated the seller to supply the buyer’s entire radiator needs for 1899 on the agreed prices and terms.
- The seller failed to establish mutual mistake; the adverse factual findings foreclosed reformation.
- The court refused to imply a limitation to “usual” quantities or prior years’ maxima based solely on past dealing.
- Although requirements contracts are constrained by good faith and actual business needs, the seller neither pleaded nor proved that the buyer’s orders were speculative or made in bad faith.
- Evidence concerning the buyer’s business and needs was properly received to show what the buyer’s requirements were.

## Legal Principles

- A requirements contract may be enforceable even without a stated numerical quantity when the quantity is defined by the buyer’s actual requirements for a stated period.
- Courts will not add an unstated quantity cap to a clear “entire needs” promise merely because the buyer’s requirements increase beyond prior years.
- Reformation for mutual mistake requires proof of a shared mistake; when the fact-finder rejects that claim, the written terms control.
- A buyer’s demands under a requirements contract must reflect good-faith, genuine business needs; ordering solely for speculation may fall outside the contract, but the seller bears the burden to plead and prove such a defense.
- Proof of a buyer’s “needs” may be shown through factual testimony about its business operations and requirements.

## Conclusion

The court held the seller breached an open-quantity requirements contract by refusing to supply radiators beyond the buyer’s prior annual maximum, where the written agreement covered the buyer’s entire needs for the year and the seller failed to prove mutual mistake or bad-faith ordering.


New York Cent. Iron Works Co. v. United States Radiator Co., 174 N.Y. 331, 66 N.E. 967 (N.Y. 1903)