## Facts

- Walbro Engine Management, LLC (Walbro) and Surecan, Inc. (Surecan) signed a memorandum of agreement under which Walbro would produce, and Surecan would buy, up to five million units of a specified product.
- The memorandum contemplated a large-scale, multi-year relationship and anticipated future performance by both sides.
- The memorandum left major economic terms open, including price and payment terms, and the parties continued discussing those terms after signing.
- In anticipation of performance, Walbro prepared to manufacture the units.
- Surecan, expecting to receive the units, leased warehouse space and hired employees.
- The relationship deteriorated when Walbro and Surecan could not reach agreement on price and payment.
- Walbro filed a circuit-court action seeking a declaratory judgment that the memorandum was not an enforceable contract (and, in the alternative, declarations related to breach).
- Surecan counterclaimed, alleging breach of an implied contract and promissory estoppel based on Walbro’s alleged promises and Surecan’s reliance costs.
- The trial court granted summary disposition to Walbro and dismissed Surecan’s counterclaims. Surecan appealed, relying on Michigan’s UCC.

## Issues

1. Whether the memorandum of agreement formed an enforceable contract for the sale of goods under Michigan’s UCC when price and payment terms were left open and later disputed.
2. Whether the UCC’s gap-filling provisions could supply missing price/payment terms on this record.
3. Whether Surecan stated viable claims for breach of an implied-in-fact contract or promissory estoppel based on the parties’ conduct and Surecan’s reliance expenditures.
4. Whether summary disposition for Walbro was proper under the applicable Michigan Court Rules.

## Decision

- The Michigan Court of Appeals affirmed the trial court’s orders granting summary disposition to Walbro.
- The court agreed that the memorandum was not enforceable as a sales contract because the parties had not reached agreement on key economic terms, including price and payment.
- The court rejected Surecan’s reliance on UCC open-term concepts where the evidence showed ongoing disagreement, not merely an omitted term in an otherwise completed bargain.
- The court affirmed dismissal of Surecan’s counterclaims for implied contract and promissory estoppel because the alleged agreement or promise was not sufficiently definite to be enforced.

## Legal Principles

- A contract for the sale of goods under Michigan’s UCC requires a showing that the parties intended to be bound and that there is a reasonably certain basis to determine breach and provide a remedy.
- UCC gap-fillers may supply certain missing terms, but they do not create a contract when the record shows the parties did not reach mutual assent on a material economic term and continued negotiating it.
- An implied-in-fact contract still requires mutual assent; preparatory actions consistent with anticipated business dealings do not establish a contract when essential terms remain unresolved.
- Promissory estoppel requires a clear and definite promise; statements tied to unresolved negotiations over major terms do not support reasonable reliance as a matter of law.
- Summary disposition is appropriate when the opposing party cannot show a genuine issue of material fact on contract formation or cannot plead facts that, if proved, would satisfy the elements of the asserted claims.

## Conclusion

The court treated the memorandum as a preliminary framework rather than a binding UCC contract because the parties never settled price and payment terms and their later conduct showed continued disagreement, not a completed deal. Because Surecan could not identify definite assent to material terms or a clear promise supporting reasonable reliance, its implied-contract and promissory-estoppel theories could not substitute for the missing agreement, and summary disposition for Walbro was affirmed.


Walbro Engine Management, LLC v. Surecan, Inc., 2017 WL 6345825 (2017)