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American Hospital Supply Corp. v. Hospital Products Ltd.

United States Court of Appeals for the Seventh Circuit
780 F.2d 589 (1986)


Hospital Products Ltd. (defendant) manufactured surgical stapling systems. Pursuant to an exclusive agreement, American Hospital Supply Corp. (AHS) (plaintiff) was the sole distributor of Hospital Products’ surgical stapling systems in the United States. The initial term of the contract was for three years, and it was to renew automatically for one-year periods thereafter unless AHS notified Hospital Products that it wanted to terminate the contract. AHS gave no such notice, and in fact indicated to Hospital Products that it intended to renew. Nonetheless, after the initial term of the contract, Hospital Products refused to renew the contract with AHS. AHS sued Hospital Products for breach of contract and moved for a preliminary injunction forbidding Hospital Products to take any action that would violate AHS’s rights under the contract. The district court granted the preliminary injunction. Hospital Products filed for bankruptcy and appealed.

Rule of Law


Holding and Reasoning (Posner, J.)

Dissent (Swygert, J.)

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