Duffy Tool & Stamping, Inc. v. Bosch Automotive Motor Systems Corp.

Bosch Automotive Motor Systems Corp. (Bosch) (defendant) contracted with Duffy Tool & Stamping, Inc. (Duffy) (plaintiff) for the supply of mounting plates that Bosch would use in its air conditioner motors. The contract required that Duffy produce the mounting plates according to Bosch’s specifications. A dispute emerged over the quality of the plates. Duffy, under economic strain due to the increasing cost of steel, notified Bosch that it would stop supplying the mounting plates after six weeks, even though two years remained on the contract. According to Bosch, this would have made it impossible for it to continue supplying the Ford Motor Company with air conditioners, because Bosch relied solely on Duffy for the parts. At a meeting, Duffy promised to continue supplying mounting plates for a limited time, but only if Bosch agreed to a 10 percent price increase and a $3,000 tooling setup charge. Duffy then sent a letter specifying terms for a winding down of the contract, proposing that Duffy would continue to supply the plates for another six months, that part prices would be increased, and that Duffy would be held harmless on all claims relating to the contract. Subsequently, Bosch’s president promised not to sue Duffy in a phone call. Bosch quickly found a new supplier. Duffy delivered its last shipment with an invoice. Bosch notified Duffy that some of the mounting plates were defective and could not be used. The parties could never agree on an adjustment, and Bosch did not pay Duffy’s last invoice. Duffy sued Bosch in state court to collect on its last payment. Bosch counterclaimed for breach of the supply contract. A trial court found that Duffy had breached the supply contract, but that Bosch owed Duffy for the last delivery. The trial court then offset the judgments, which amounted to Bosch receiving an award of $133,542.66. Duffy appealed the judgment, arguing that Bosch had expressly waived its breach-of-contract claim, and that Duffy could not be liable under the original contract because the parties modified the contract to allow Duffy to substitute reduced performance.