Terry Barr Sales Agency, Inc. v. All-Lock Company, Inc.
United States Court of Appeals for the Sixth Circuit
96 F.3d 174 (1996)
All-Lock Company, Inc. (All-Lock) (defendant) was a manufacturer of locks and latches for automobiles. In 1973, All-Lock entered into an oral agreement with Terry Barr Sales Agency, Inc. (Barr) (plaintiff). Under the agreement, Barr would sell All-Lock’s products to automobile manufacturers in exchange for a commission. Additionally, Barr would service some pre-existing sales that were previously serviced directly by All-Lock. These inherited accounts were subject to a reduced commission rate. Barr and All-Lock did not discuss whether the agreement covered post-termination commissions. A fairly common practice in these types of agreements was for the sales agent to be paid for the life of the part because of the resources required to procure an initial contract. Once the contract was obtained, buyers could continue ordering the same parts for many years. In 1994, All-Lock terminated the oral agreement with Barr and refused to pay post-termination commissions after 90 days. All-Lock asserted that the course of performance of the agreement established that All-Lock and Barr did not intend for the agreement to provide for post-termination commissions. There were several situations in which Barr did not request post-termination commissions, but these situations either involved former employees of Barr or represented insignificant commissions. Barr sued All-Lock for breach of contract. The district court granted summary judgment to All-Lock, and Barr appealed to the United States Court of Appeals for the Sixth Circuit.
Rule of Law
Holding and Reasoning (Martin, J.)
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