On April 22, 2026, the Michigan Supreme Court entered an order dismissing the appeal of FCA US LLC v. Kamax Inc., a case of considerable importance to manufacturers—particularly automotive suppliers—that commonly utilize requirements contracts to govern long-term supply arrangements. The Kamax case has garnered significant interest from manufacturers since the Michigan Supreme Court granted leave to appeal the decision on October 29, 2025. In anticipation of the Court’s ruling, numerous organizations and entities submitted amicus briefs to the Court including the Michigan Manufacturers’ Association and the State Bar of Michigan’s Business Law Section. Oral argument on the case had been scheduled to be heard by the Court in May. The Court entered the order in response to an April 7, 2026, request from Kamax parties to dismiss the action following the parties’ out of court settlement of the dispute, which is confidential.
Had the Court heard argument and decided the merits of the appeal, the Court’s decision was expected to offer much-needed clarification to automotive suppliers on some of the critical questions that have bedeviled suppliers and the courts in the wake of the Court’s landmark decision in MSSC, Inc. v. Airboss Flexible Products Co. (2023) with respect to what contractual language is necessary to create a valid “requirements contract” under Michigan law—a type of agreement where a seller agrees to provide all of a buyer’s needs for specific goods or services and, in exchange, the buyer agrees to purchase a specified portion of its requirements from that seller for a set period. In particular, the Michigan Supreme Court had granted leave to consider: (1) whether Cadillac Rubber & Plastics, Inc. v Tubular Metal Sys., LLC, 331 Mich App 416, 952 N.W.2d 576 (2020)—where, in relevant part, the Michigan Court of Appeals held that a purchaser’s obligation to purchase a quantity between “one part and 100%” of its requirements from a supplier constituted a requirements contract as a matter of law—remains good law after the Court’s decision in Airboss; and (2) whether a written contract for “approximately 65-100%” of a purchaser’s requirements satisfies the requirements of the Uniform Commercial Code’s statute of frauds, MCL § 440.2201(1).
Despite the Kamax parties’ request to dismiss the appeal, the Michigan Supreme Court appeared to consider whether it could have denied the parties’ request and proceeded with oral argument or rendered a sua sponte decision overturning Cadillac Rubber. However, the Court declined to take either approach and ultimately entered dismissal. Though the Michigan Supreme Court’s dismissal of the Kamax appeal may be a disappointment for manufacturers that had hoped for greater clarity, the fact that the Court granted leave to appeal suggests the Court has recognized the need for further certainty and is likely to revisit the issue in a future case where the opportunity arises.
Automotive suppliers should consider the following implications from the Michigan Supreme Court’s dismissal of the Kamax appeal:
- For the time being, there remains a split between the approach taken by the State and Federal courts in Michigan.
- Several State courts – including the Michigan Court of Appeal in the Kamax matter – have held that Cadillac Rubber remains good law. As such, Michigan State courts will remain likely to enforce contract language allowing a purchaser to procure an indeterminate range of its requirements from a supplier (in Kamax, for example, the Michigan Court of Appeals held that “a quantity between 65% and 100% constituted a proper quantity term.”)
- In contrast, several Federal courts have held that the decision in Cadillac Rubber, and indeterminate ranges more generally, are fundamentally incompatible with the decision in Airboss. Most notably, in Higuchi Int’l Corp. v. Autoliv ASP, Inc., 103 F.4th 400 (6th Cir. 2024), the Sixth Circuit reasoned that under Airboss valid requirements contract language must “explicitly and precisely specify that [a purchaser] will obtain a set share of its total need from [a supplier].” It is unclear whether the contract language at issue in Kamax would pass muster under Higuchi.
The Kamax dismissal serves as a reminder that all parties to purported “requirements” contracts should proactively review their purchase orders and other contract terms and consider whether they are bound by a requirements contract or if their contract lacks the necessary specificity in the quantity term. Foley & Lardner LLP stands ready to assist its clients as they navigate the evolving landscape of Michigan contract law and the implications it has across requirements contracts—even in other states—given the fact that 49 states have adopted the Uniform Commercial Code.
