335 N.E.2d 320 (N.Y. 1975)
The case of Feld v. Henry S.
Did Levy's cessation of bread crumb production, due to lack of profitability, constitute a breach of the requirements contract under the good faith obligation stipulated by the UCC?
Under the UCC, a requirements contract obliges the seller to supply the buyer with such quantities of goods as the buyer may require in good faith. The seller may only cease supply if the decision is made in good faith and such curtailment is not commercially unreasonable.
The Court held that Levy did not breach the requirements contract. Levy's cessation of production was made in good faith due to financial nonviability and was not commercially unreasonable.
Feld v. Henry S. Levy & Sons, Inc. is significant for its in-depth examination of good faith in requirements contracts. The case provides an illustrative benchmark about business practicality in contract performance, showing that a genuine lack of profitability can justify non-performance under a requirements contract. For law students, this case offers key lessons in interpreting the UCC, specifically about balancing contract obligations with practical business judgments.