Vanessa Miller Comments on Michigan Supply Chain Ruling, Impact to Auto Industry
Foley & Lardner LLP partner Vanessa Miller is quoted in the Law360 article, “Mich. Supply Chain Ruling Shakes Up Auto Industry,” commenting on a recent Michigan Supreme Court decision that clarifies when long-term supply contracts are enforceable.
Miller, who is chair of Foley’s automotive team, said she sees the decision as potentially signaling a shift in how suppliers are treated in automotive contracts.
“This is the first I think of what will be a right-sizing in the automotive industry, saying that there needs to be more of what we see in other manufacturing industries: mutuality of obligation, some more transparency in the volumes and more protections for suppliers,” she explained.
Miller added that many blanket-order requirements contracts are still valid under the decision, as long they contain other terms that can satisfy the statute of frauds, like a requirements term guaranteeing the buyer will source all or some of its requirements from the seller.
“This doesn’t mean that requirements contracts are invalid, just that there’s certain magic words and language that’s required, and one of those things that you have to be doing is promising to buy something,” Miller described. “A great many buyers’ contracts are still going to be fully enforceable, and even those that aren’t, the buyers can still address at least on a future basis by making changes in their terms and conditions to bring them in line with the opinion.”
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