## Facts

- A candy manufacturer regularly bought chocolate coating from a supplier and accrued an unpaid open-account balance of $2,925.
- The parties signed a written agreement under which the buyer would purchase all of its chocolate-coating requirements from the seller for five years.
- The agreement set price as the seller’s “list price,” which the seller could change over time and which varied among customers based on volume and competitive conditions.
- The next day, the buyer’s president separately assumed the existing debt and agreed the buyer would purchase only from the seller until the assumed indebtedness was paid.
- The assumed debt was repaid in less than three years; thereafter, the buyer began purchasing chocolate from other suppliers before the five-year period ended.
- The seller sued for lost profits for breach of the five-year requirements agreement; a jury awarded $1,500.
- The trial court entered judgment notwithstanding the verdict (JNOV) for the buyer, concluding the contract was too indefinite as to price; the seller appealed.

## Issues

1. Whether a five-year requirements contract priced at the seller’s variable “list price,” determined solely by the seller, is sufficiently definite to be enforceable.
2. Whether the trial court properly granted JNOV after a plaintiff’s verdict where the claim depended on an unenforceable contract.
3. Whether the later debt-assumption agreement limited the buyer’s obligation to buy exclusively from the seller only until the debt was repaid.

## Decision

- The Washington Supreme Court affirmed the JNOV for the buyer.
- The court held the five-year requirements agreement was unenforceable because the price term was indefinite: “list price” was subject to unilateral change by the seller without any objective standard.
- Because no enforceable five-year contract existed as a matter of law, the seller could not recover damages for an alleged breach, notwithstanding the jury’s verdict.

## Legal Principles

- A sales contract must include a definite price term or a definite, objective method for determining price; an essential term cannot be left entirely to one party’s discretion.
- A price set solely by the seller’s changeable internal “list price,” unconstrained by an agreed standard (e.g., market price, reasonableness, or a formula), is too indefinite and lacks mutuality for enforcement.
- Requirements contracts are not invalid merely because quantity is defined by the buyer’s requirements; enforceability depends on sufficiently definite obligations, including a workable pricing term.
- JNOV is proper when, even viewing the evidence most favorably to the verdict winner, the claim fails as a matter of law because it rests on an unenforceable agreement.

## Conclusion

The court enforced the requirement that essential price terms be ascertainable and held that a multi-year requirements agreement priced at a seller-controlled, fluctuating “list price” is too indefinite to support liability for lost profits, warranting judgment for the defendant despite a jury verdict for the plaintiff.


Wash. Chocolate Co. v. Canterbury Candy Makers, Inc., 18 Wn.2d 79, 138 P.2d 195 (Wash. 1943)