Okla. Stat. tit. 12A § 2-306

Current through Laws 2024, c. 378.

Section 2-306 - Output, Requirements and Exclusive Dealings

(1) A term which measures the quantity by the output of the seller or the requirements of the buyer means such actual output or requirements as may occur in good faith, except that no quantity unreasonably disproportionate to any stated estimate or in the absence of a stated estimate to any normal or otherwise comparable prior output or requirements may be tendered or demanded.

(2) A lawful agreement by either the seller or the buyer for exclusive dealing in the kind of goods concerned imposes unless otherwise agreed an obligation by the seller to use best efforts to supply the goods and by the buyer to use best efforts to promote their sale.

Okla. Stat. tit. 12A, § 2-306

Laws 1961, p. 80, § 2-306.

Oklahoma Code Comment

(1) Oklahoma has heretofore recognized "output" and "requirement" contracts. They have been held enforceable even though there is no established trade, and therefore no means to determine with accuracy the probable amount of goods to be produced or needed. Baker v. Murray Tool & Supply Co., 137 Okl. 288, 279 P. 340 (1929). But see Rogers v. White Sewing Machine Co., 59 Okl. 40, 157 P. 1044 (1916). An agreement was construed as a requirement contract, even though an estimate of quantity was stated, if the parties so intended. Bell-Wayland Co. v. Russell Jobbers' Mills, 92 Okl. 201, 218 P. 827 (1923); M. W. Kellogg Co. v. Standard Steel Fabricating Co., C.A., 189 F.2d 629, 26 A.L.R.2d 1090 (1951). The buyer was permitted to alter his business, even though it increased or decreased his requirements if done in good faith. In Southwest Natural Gas Co. v. Oklahoma Portland Cement Co., C.C.A., 102 F.2d 630 (1939), cited in the official comment as an illustration of a reasonable variation of an extreme sort, the Cement Company contracted to purchase all the gas it needed in its business. A few years later the Cement Co. modernized its plant and thereby reduced its needs for gas more than fifty percent. The court held that it had not breached its contract because the improvement was done in good faith. But in Bell-Wayland Co. v. Russell Jobbers' Mills, 92 Okl. 201, 218 P. 827 (1923) the court found bad faith, and thus held that the buyer had breached. The contract was for the purchase of all the buyer's needs for vinegar. The contract stated an estimate of from three to six cars but the purchaser had in fact ordered only 90 barrels until the price advanced sharply, and then he placed an order for a carload. The court held that the order was placed in bad faith, and the seller was therefore justified in refusing shipment.

(2) There are no previous Oklahoma cases raising this particular problem. In all of the previous Oklahoma decisions the agreement itself imposed obligations on the buyer, or the buyer had actually performed services under the agreement. See Ash v. Chas. F. Noble Oil & Gas Co., 96 Okl. 211, 223 P. 175 (1924); Leisy Brewing Co. v. Shafer, 91 Okl. 105, 216 P. 109 (1923).