## Facts

- Terry Barr Sales Agency, Inc., a Michigan manufacturer’s representative, and All-Lock Co., a New Jersey automotive lock and latch manufacturer, formed an oral agency relationship in 1973.
- Terry Barr Sales promoted All-Lock products and obtained orders from original-equipment automobile manufacturers in exchange for commissions.
- Commission rates were approximately 3.5% for new business and 2% for servicing preexisting business.
- The parties disputed whether the oral agreement included a “life-of-the-part” term requiring All-Lock to pay commissions on continuing orders generated from accounts Terry Barr Sales developed, even after termination.
- In 1994 All-Lock restructured its marketing and terminated Terry Barr Sales as the representative for the latch product line while retaining it on certain other accounts.
- After termination, All-Lock maintained that any post-termination commissions were limited to a short period (asserted as 90 days) and refused further payments.
- Terry Barr Sales sued in the Eastern District of Michigan asserting breach of contract, unjust enrichment, promissory estoppel, and treble damages under Mich. Comp. Laws § 600.2961; related litigation filed by All-Lock in New Jersey was consolidated in Michigan.
- The district court granted summary judgment to All-Lock, dismissed the equitable claims as barred by the existence of a contract, and held § 600.2961 unconstitutional under Michigan’s Title-Object Clause.

## Issues

1. Whether the oral agency agreement obligated All-Lock to pay post-termination commissions, including “life-of-the-part” commissions, on business Terry Barr Sales procured.
2. Whether summary judgment was proper where the parties disputed the intended terms of an oral agreement governing post-termination commissions.
3. Whether unjust enrichment and promissory estoppel may proceed as alternative theories when the scope of the contract term at issue is disputed.
4. Whether Mich. Comp. Laws § 600.2961 violates the Michigan Constitution’s Title-Object Clause.

## Decision

- The Sixth Circuit reversed and remanded.
- The court held that genuine disputes of material fact existed regarding the parties’ intent on post-termination commissions, making summary judgment on the contract claim improper.
- The court reinstated unjust enrichment and promissory estoppel because those theories may be pleaded in the alternative when the contract’s coverage of the disputed term is uncertain.
- The court upheld the constitutionality of Mich. Comp. Laws § 600.2961 under the Title-Object Clause and revived the statutory treble-damages claim.

## Legal Principles

- Disputed terms of an oral contract—especially terms turning on intent and course of dealing—ordinarily present fact questions not suitable for resolution on summary judgment.
- In commission disputes, entitlement may depend on whether the agent was the “procuring cause” of the sales and on the parties’ intended allocation of commissions after termination.
- A plaintiff may pursue unjust enrichment and promissory estoppel in the alternative when the existence or scope of an asserted contractual term is contested.
- Mich. Comp. Laws § 600.2961, providing enhanced remedies for intentional nonpayment of sales commissions, is consistent with Michigan’s Title-Object Clause when included within the Revised Judicature Act’s remedial framework.

## Conclusion

The Sixth Circuit required further factfinding on whether the parties’ oral agency agreement entitled the sales representative to post-termination commissions, allowed alternative equitable claims to proceed pending resolution of the contract’s scope, and restored the statutory treble-damages remedy by rejecting a state constitutional challenge to Mich. Comp. Laws § 600.2961.


Terry Barr Sales Agency, Inc. v. All-Lock Co., 96 F.3d 174 (6th Cir. 1996)