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Corrugated Paper Products, Inc. v. Longview Fibre Co.

868 F.2d 908 (1989)

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Corrugated Paper Products, Inc. v. Longview Fibre Co.

United States Court of Appeals for the Seventh Circuit
868 F.2d 908 (1989)

SC

Facts

Corrugated Paper Products, Inc. (Corrugated) (plaintiff) informed Atlas Corrugated Machinery, Inc. (Atlas) that it wished to buy a used cut-off knife. Atlas began discussions with Longview Fibre Company (Longview) (defendant), which had a cut-off knife for sale. Atlas informed Longview that it had a potential buyer for the knife, but Atlas committed to Longview that it would buy the knife regardless of whether any further sale to a third party came to fruition. It was common practice for companies in the industry to contract to purchase equipment with a subsequent purchaser already lined up. Corrugated spoke directly with Longview about the knife in question and traveled to Longview’s plant to inspect the knife in person. Corrugated signed an agreement with Atlas to buy the knife from Atlas. Atlas sent a purchase order to Longview to purchase the knife from Longview. Ultimately, the knife was not shipped to Corrugated. Corrugated sued Atlas and Longview. The district court granted summary judgment to Corrugated against Atlas, but the judgment was uncollectible. The district court also granted summary judgment to Longview. Corrugated appealed, claiming to be a third-party beneficiary of the contract between Atlas and Longview.

Rule of Law

Issue

Holding and Reasoning (Cudahy, J.)

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