Cloud Corp. v. Hasbro Inc.
United States Court of Appeals, Seventh Circuit
314 F.3d 289 (2002)
Hasbro Inc. (Hasbro) (defendant) sold a toy requiring the use of a packet of a specific powder. Cloud Corp. (Cloud) (plaintiff) mixed and packaged this powder for Hasbro according to a formula developed by Hasbro. Hasbro sent to Cloud a “terms and conditions” form stating that Cloud could not deviate from the terms of the form without Hasbro’s written consent. At some point, the toy began losing popularity and the final purchase orders for the powder were sent to Cloud. Cloud ordered the necessary ingredients for the powder based upon these purchase orders. Before the final purchase orders could be supplied, however, Hasbro provided Cloud with a new formula for the powder, which required less of one of the expensive ingredients, Laponite. Cloud mixed and packaged the powder according to the new formula, but because it had already purchased the Laponite based upon the old formula, it had excess Laponite. Cloud therefore pre-mixed and pre-packaged packets additional to those requested through the purchase orders. Cloud sent an order acknowledgment for the original purchase orders, but included the additional packets as well, despite not having received a purchase order for the additional packets. Hasbro received the acknowledgment, but did not explicitly respond. A Hasbro employee did, however, exchange emails and have phone conversations with Cloud discussing various terms of the agreement. These emails included numbers consistent with Cloud’s order acknowledgment, as did a memorandum written and signed by another Hasbro employee. Hasbro refused to accept delivery of or pay for any of the additional powder. Cloud filed suit for breach of contract. The district judge ruled in Hasbro’s favor. Cloud appealed to the United States Court of Appeals for the Seventh Circuit.
Rule of Law
Holding and Reasoning (Posner, J.)
What to do next…
Unlock this case brief with a free (no-commitment) trial membership of Quimbee.
You’ll be in good company: Quimbee is one of the most widely used and trusted sites for law students, serving more than 97,000 law students since 2011. Some law schools—such as Yale, Vanderbilt, Berkeley, and the University of Illinois—even subscribe directly to Quimbee for all their law students. Read our student testimonials.
Learn more about Quimbee’s unique (and proven) approach to achieving great grades at law school.
Quimbee is a company hell-bent on one thing: helping you get an “A” in every course you take in law school, so you can graduate at the top of your class and get a high-paying law job. We’re not just a study aid for law students; we’re the study aid for law students. Read more about Quimbee.
Here's why 175,000 law students have relied on our case briefs:
- Written by law professors and practitioners, not other law students. 14,000 briefs, keyed to 188 casebooks. Top-notch customer support.
- The right amount of information, includes the facts, issues, rule of law, holding and reasoning, and any concurrences and dissents.
- Access in your classes, works on your mobile and tablet. Massive library of related video lessons and high quality multiple-choice questions.
- Easy to use, uniform format for every case brief. Written in plain English, not in legalese. Our briefs summarize and simplify; they don’t just repeat the court’s language.