In the case of Corenswet Inc. v. Amana Refrigeration Inc. (594 F.2d 129 (5th Cir. 1979)), Amana attempted to terminate a contract with Corenswet to sell appliances after seven years of working together. Corenswet felt the termination was ‘arbitrary and capricious’, and sued to keep the contract in place. Although the contract was infinite in duration, it had a clause saying that it was terminatable by either party with just 10 days notice. The Trial Court found that the termination was a breach of good faith. The Appellate Court reversed.
- The Appellate Court found that Amana’s only obligation was to provide ‘reasonable’ notice, as per UCC §2-309(3).