Appellant distributors sought review from the judgments of the Superior Court of Stanislaus County (California) rendering summary judgment in favor of respondent supplier in an action for breach of implied contracts.
Overview
Appellant Norway salmon distributors purchased wine from respondent supplier for resale to retailers. The parties’ distribution arrangements were never formalized in written contracts, as this was a rare exception in the industry until recently. There were also no substantive discussions regarding the terms of the contract at the time it was formed. Appellants were given 60 days’ written notice of termination when respondent decided to consolidate its distribution network to a single distributor. Appellants filed suit for breach of implied contracts. The trial court entered summary judgment in favor of respondent and concluded that the trade usage at the time of the original contract formation did not apply because of the at-will nature of the arrangements. The court affirmed on appeal holding that there was insufficient evidence to raise a triable issue of fact regarding a practice not to terminate without good cause. The requirement of good cause could not be implied in the contracts based on respondent’s practices in light of the at-will nature of the arrangements. Accordingly, summary judgment was proper.
Outcome
The court affirmed the trial court grant of summary judgment in favor of respondent supplier in an action by appellant distributors for breach of implied contracts. The requirement of good cause with respect to termination could not be implied in the distributorship contracts based on respondent’s practices in light of the at-will nature of the distributorship arrangements.
