May 17, 2014

D&G Stout v. Bacardi Imports - 923 F.2d 566 (1991) US Court of Appeals, Seventh Circuit

FACTS: General made arrangements with National to buy it.  General didn't want to sell but would have to if Bacardi would not stay on as one of its suppliers.  Bacardi told General that it was committed to staying with General.  After General turned down National's offer that afternoon Bacardi said it was not going to stay with General.  General then had to sell to National for almost $550,000 less than the initial offer.

ISSUE: Was the loss incurred from the price drop attributable to lost expectations of future profit or from an opportunity forgone in reliance of the promise?

HOLDING: In reliance of the promise.

RATIONALE: Bacardi's account was not an asset that would have been acquired by National.  Therefore the future expectations of lost profit is not an issue.  the point is that by no having Bacardi on on its side General was placed in a position where it had no bargaining power.  General had a reliance interest in Bacardi's promise to maintain doing business with it.