Kyocera Corp. v. Hemlock Semiconductor, LLC

886 N.W.2d 445 (2015)

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Kyocera Corp. v. Hemlock Semiconductor, LLC

Michigan Court of Appeals
886 N.W.2d 445 (2015)

Facts

Kyocera Corporation (plaintiff), a Japanese company, manufactured solar panels. Hemlock Semiconductor, LLC (defendant), a Michigan company, manufactured polysilicon, an essential component of solar panels. In 2005 Kyocera and Hemlock entered into a take-or-pay contract under which Kyocera agreed to purchase polysilicon from Hemlock for a fixed price over four years. Kyocera assumed all risk that would result if the price fell, and Hemlock assumed all the risk if the price rose. At the time, there was a shortage of polysilicon, and the price was relatively high. The contract contained a force majeure provision providing that neither party would be held liable in the event a government act rendered performance of the contract impossible. Over the next several years, the Chinese government gave illegal subsidies to Chinese solar panel companies, enabling them to purchase polysilicon at a much lower price. This resulted in the market price of polysilicon greatly dropping. But Hemlock insisted that Kyocera was still obligated to pay for the polysilicon at the original contracted-for price, which by this time was far higher than the market price. Kyocera sued Hemlock, arguing that the force majeure provision of the contract excused it from performing. The trial court dismissed the case, and Kyocera appealed.

Rule of Law

Issue

Holding and Reasoning (Boonstra, J.)

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