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E.C. Styberg Engineering Co. v. Eaton Corp.

United States Court of Appeals for the Seventh Circuit
492 F.3d 912 (2007)



From 1998 to 2000, E.C. Styberg Engineering Company (Styberg) (plaintiff) manufactured a custom brake assembly part for inclusion in Eaton Corporation’s (Eaton) (defendant) six-speed transmission motor vehicle part. In 1999, the parties began negotiating an agreement under which Styberg would produce large quantities of the part for Eaton. During this time several e-mail exchanges and telephone calls between employees of both parties occurred that discussed quantity and price. Lisa Fletcher, an Eaton employee, sent a letter to a Styberg engineer committing Eaton to purchase 13,000 parts. However, Styberg wanted a larger purchase commitment from Eaton to offset its capital investment in manufacturing the parts. Thereafter, no purchase order was ever issued by Eaton for the 13,000 parts. Styberg filed suit against Eaton in district court for breach of contract and sought approximately $3.4 million in damages. After a four-day bench trial, the court held that no contract had existed because the parties had failed to agree on terms. There, the court characterized the various discussions by e-mail, telephone, and letter as evidence of continued negotiations that did not constitute the basis of a formed contract. Styberg appealed.

Rule of Law


Holding and Reasoning (Flaum, J.)

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