please the court i'm christopher who's representing h j heinz i'd like to reserve five minutes for rebuttal if i may the first issue that we've raised on appeal is whether heinz was obligated under the co pack agreement to purchase with potato fries from bright harvest for the two thousand and twelve crop year and for subsequent crop years the parties however did not agree to a specific quantity and so that issue turns on whether the compact agreement is a requirements contract requirements contract is one that includes a term that measures quantity by the or requirements of the buyer and under idaho law a term that measures quantity by the buyer's requirements means that the buyer has expressly or implicitly agreed to buy goods from the seller exclusively and this element of exclusivity is absolutely necessary for requirements contract exclusivities kind of reply what it does is it provides the reasonable certain basis to actually determine quantity and it does that because the buyer agrees to buy goods of a particular kind from the seller and the buyer agree to purchase who would take her fries from bright harvest exclusively and i think the fundamental problem that the district court did was that he allowed imply provisions to contradict and to override irregular idaho law that was applied here for required its contract that all of the products that the buyer requires let's be exclusively bought from your position changes well throughout the entire you know i think our case was as always been that there was a joystick acknowledge that some would be sufficient for x i believe so your honor because that because of the way we  i'm having trouble with my second language but i don't see how you can have an exclusive contract with requirement if it's only by some of your requirements so the case law your honor is i mean has has developed such that if there is an agreement to buy some product exclusively from the seller that that is insufficient for an exclusive contrac you to feel fifty percent of my needs and i'm only going to come to you that is still an exclusive contract and the law how can that be exclusive we're going to get the other fifty percent what the case law is looking only at that quantity that is expressed in the contract your honor so i mean there are cases that find that there is this that that exclusively means absolute exclusivity and i think when you look at the leading commentators what they look at is whether or not reason the reason for that that is the reason for that is that the parties agreed that this ten thousand pounds what is that with the contradiction he says i says start with section three which is where the parties set out what's called the supply chain procedures and it starts that says heinz has a stablished a non binding plan annual planning target of ten million pounds and then it goes on to say that heinz will  provide to deliver purchase orders as here and after provided in this comma subject to bright harvest capacity i think with the district court got confused by was one of the ten the reference to the ten million pounds and then  and then and also the reference to subject to harvest capacity and under neither of those did hines agree to actually buy the ten million pounds it also did not agree to buy right harvest capacity and when you look at the whole of the contract the whole of the contract if it confirms that heinze was not making that type of agreement what hines was agreeing to was to place purchase orders in the supply chain agreements talk about the fact that bright harvest is going to set its capacity and there's no there's absolutely no promise of capacity to heinz jaimie bright harvest did not commit any capacity to heinz it was just going to inform heinz on an annual basis what that capacity would be hind within in turn these twelve to eighteen month rolling forecasts and those forecasts would eventually kind of roll into an eight eight week forecast and then into what they called weekly demand files and once those weekly demand files hit that fifth week that is what hines agreed to purchase and so that the i think the language of the contract is very clear on that there is absolutely no agreement to purchase bright harvest capacity and there's no agreement to purchase this ten million   were two parts that the court found were ambiguous the first was this reference to harvest capacity again what the contract says in section three little lie is that heinz will deliver purchase orders as here in after provided subject to right harvest capacity but the court believe that seem to say is that heinz was going to deliver purchase orders subject to right harvest capacity and completely ignored the reference to the rest of the contract the other ambiguity that the court found was this ten this reference to the ten million pounds and so there is case law that says that if you agree to if you agree to purchase a stated estimate that that is sufficient to imply was required to buy up to harvest capacity that's what the court viewed that that contract could be read to mean that hines was obligated to buy up to bright harvest capacity and that's just not what it says are clear that there is only one meaning and the which is which is that hines was not required to buy any amount of quantity for this two thousand and twelve crop year beyond and that was the whole issue because the parties had it they had this agreement they operated under it for the two thousand and ten crop year they operated under for the two thousand and eleven crop year the question was did they have to did was heinz obligated to buy any quantity in the two thousand and twelve crop year for the remainder of the contract that was the issue the court found that the con that the contract was ambiguous with respect to that in the reason it found that it was written bigamous is for what we've discussed about the subject to harvest capacity and the fact that there were he thought that there was a stated estimate which was this ten million pounds of non binding annual planning target and our argument on appeal is that the court erred because the clear language of the contract simply doesn't state state that heinz did not agree to buy right harvest capacity it agreed to provide forecasts which will eventually roll into a five weeks of firm purchase orders that i didn't that also did not agree to purchase this ten million pound non binding planning target i mean the party specifically a dinner fight it as non was to purchase pursuant to the supply chain procedures subject to their capacity and if you look closely at this section three little i and three little if they couldn't produce could you say they were in default there is no requirement for them to provide a minimum companion minimum capacity or honor there is no requirement that they provide their capacity to hin what is the meaning of the as as we put it under the supply chain procedures so i think these are set out very clearly as far as that bright harvest starts starts out it says this is my capacity for the year then heinz comes out and it says ok here's my twelve to eighteen month forecast and those eventually roll into a firm purchase orders but there's no requirement that hines buy any minimum out there's no requirement in the contract and for the only way the only way for this contract to be enforceable for the two thousand and twelve crop year is if it's requirements contract which is where we get to exclusively and stated estimate and these other did he didn't they agreed that they so it wasn't as simple as we're just going to place a purchase orders for right harvest capacity the the parties articulated a very specific process for how purchase orders would be made and that is what heinz agree goals under this this correct agreement correct and we may need up to ten million pounds but we may not need correct and bright harvest was protected in this because they're the ones that set their own capacity there was no minimum value volume that they guaranteed to heinz in addition there's other provisions of the contract that allow if heinz was not going to use use up to ten million pounds that they could use it themselves and there's also provisions that if for some reason the forecasts heins actual orders are below the forecasts that heinz will be responsible for those for those for that extra product no one is safe in time for i do and just very quickly are we have we do have an issue on the on the motion for new trial and our main argument here just very quickly is that the district court erred because he was looking through the wrong lens for what's good faith under a requirement under the u c c and if the if you would have used the correct lens he would have had to consider all the evidence and that was abuse of discretion ok thank you thank you we'll hear from right harv it please the court judge nicholson on behalf of forever sweet potato company as the court has recognized i think the fundamental issue here is is this contract ambiguous that is the issue that has been appealed bribers position is that the contract by its own terms doesn't in fact set forth exclusivity but at the very least reading the contract in its entirety shows it is ambiguous and therefore the district court was correct these that the contract does not show capacity there is a recognition that at some point there may be a demand that exceeds their capacity and so in that event heinz said that it can self manufacture or go elsewhere but back to your point you are correct that our position is there absolutely does have to be orders here section one of the co pact agreement expressly states that hines shall place purchase orders and it does say under the terms of this agreement but it expressly says they shall place purchase orders similar language is also shown up then in section three i as well where it indicates that the parties intend that heinz will deliver purchase orders these are is submitted they will follow that supply chain procedure but you get to that point after the fundamental question of they've committed that they will in fact order from from bright harvest with respect to exclusivity i would again address to the court several provisions of the contract and the opening page of the co pac agreement it does state the party's intentions and what it indicates is that hines desires to obtain obtain a supply of frozen process we potatoes the indication here is not multiple supplies an additional supplier or another supplier so heinz is indicat wants a singular supply and other words an exclusive source when you look at section three i it also indicates that bread harvest was required to reserve capacity what  hines's has ignored in its argument and its in spree thing is that the only circumstance when bright harvest was not required to reserve capacity was when a series of events occurred all of which were within heinz control under section million pounds did bright i was then bright i was then have the option to use its own capacity hundreds of senior highs well actually no bright harvest to use that ten million capacity but before it used that ten million capacity it had to notify heinz and given the thirty day right of refer spread of refusal to that capacity so heinz didn't use that capacity up it can controlled letting bright harvests use that elsewhere so there is clearly an exclusive portion of bright harvest capacity that will be dedicated to heinz the determination clause also i think clearly indicates that there is exclusiv here this is section twenty one and and that clause sets forth three different ways that this contract can be terminated and bear in mind section two indicates that this is a six year contract the three ways that this can be terminated and are through essentially a bankruptcy a breach of the agreement or the third is a merger in this instance and this is only at the at the option of heinz if bright harvest becomes a party to a merger such that bright harvest is now part of a competitor then heinz has the option to get out of this contract that clause only makes sense if heinz is expressly obligated to go to bright harvest and purchase exclusively from them ten million pounds upright harvest capacity that makes sense under heinz reading of this contract what section twenty one creates is an option to get out of an option to buy you simply don't need that language there you just stop buying from them if that's what this contract was all about  in essence what hines is really contended is that this is an option contract but as i've indicated that simply does not give meaning to all the terms in the contract and it creates irreconcilable and consistencies there's only the past consideration that they submit to the court or identify is creating consideration for that contract is there's been no evidence demonstrated relies upon clearly indicates that past consideration is its consideration for a new contract only in the in the rarest of circumstances and that's not the situation that we have here so in some it's our position that the the terms of the co pac agreement do very clearly indicate that exclusivity is present at the very least there's an ambiguity and the district that we think it's unambiguous that there is exclusivity and that they have to purchase from us we also have did they have to purchase ten thousand to ten million pounds they had to purchase ten million pounds up to break harvest capacity to purchase that's what section three i mean we think that again and i think i said purchase they were obligated to purchase up to ten pounds and up to bright harvest capacity to produce so it could be less it could be  and part of that is as when you understand that and you look at the ambiguity here and a questionable me what does that mean that's where looking at the circumstances that this was created gives meaning to these terms this copaxone agreement was created in an environment where heinz competitors for this particular product were already in the market heinz did not have the capacity to produce this at the time they had no other options to produce this there was also uncertainty as to what the amount of the product would be needed for the sweet potato fries and that was because we potatoes was kind of a new item in the marketplace it was that this was you know obviously several years ago two thousand and eight two thousand and nine that it was kind of a fad of the time and heinz wanted to get into the market but they weren't certain if they would need ten million pounds or forty million pounds but bright harvest was positioned to where they could get them into the market very very quickly but the again the parties recognize that this product may exceed bright harvest capacity to produce particularly the capacity that bright harvest was contractually obligated to reserve under three i so that's the reason for that that amount of approximately ten million pounds or as the estimate of ten million pounds subject to their capacity to produce and so we segue away so let me let me come back to it if bright harvest capacity to produce was eight million pounds but heinz only needed say approximately four half million pounds then because this was a requirements contract heinz was obligated to order and purchase from a bright harvest for a half million pounds its requirements and but heinz couldn't say we need eight million pounds we were only going to buy foreman pound and produce four million ourselves provided the bright harvest had the capacity to produce that is correct but in the event that heinz needed thirteen million pounds and bright harvest had only a million pounds of capacity heinz was then entitled to produce that excess five and what i was that trying to transition to and not trying to duck your question was with respect to the grant of the new trial that's that's precisely what we have here and this argument of good faith it really confuses the issue at trial there was absolutely no dispute that heinze had requirements for the products subject this this agreement it was undisputed the amount was undisputed there was also no dispute whatsoever that not a single pound of that product was purchased from right harvest and as you consider this so what we have is we've found a valid requirements contract that obligates heinz to purchase it's requirements subject bright harvest capacity produce and bright harvest had been producing approximately seven to seven a half million pounds a year they had the capacity to produce that four point roughly four point five million pounds there's simply a breach there the good faith element really you know your will that is one of our arguments we do believe that that including the stated estimate can under section two three zero six as well does create a valid and enforceable requirements contract that you know that it's an estimate as well again as in when you look at the capacity the price harvest is required to reserve if it's not an estimate there's simply no reason to tell bright harvest to reserve that amount of capacity  but we do believe that the presence of the stated estimate also suffices under idaho law what was your position at trial with respect to the amount that they had to buy for the two thousand and twelve year our position at trial was that they were obligated to purchase from harvest the amount produced because that was within our capacity and that goes back to the good faith it was approximately the amount produced which was i pods the amount that they required or that they internally produced which was i believe approximately four point two four point five million pounds they were required to buy at least that amount that was the amount they were required to purchase and there is not an argument and i think this is where good faith would come in as the argument is not that well bright harvest had the capacity to produce seven and a half million so you had to buy that there's not a challenge there's not a dispute the amount of price of she's made heinz requirements was reached in good faith it's the fact that ok and unless there's any other questions i have nothing further i don't hear any so thank you thank you i believe the council for bright harvest had some additional time yes thank you you honor the contract simply does not state put right harvest is saying there are no expressed terms in the contract that obligated heins to purchase any minimal quantity from but harvest and there's nothing in the contract there's  nothing in the contract that says that bright harvest had to reserve any minimum of capacity for heinz that is just not what section three of this of the of the contract says and to to find to read the contract as the district court thought it could be read in as bright harvest contends means that you're going to have to you have to imply terms that do contradict and override these expressed terms of the contract mean there is a specific term that allows heinz to self produce there are still in the specific terms of say we're going to follow the supply chain procedures and that is what heinz agreed to do what it wanted here was flexibility and it one of flexibility for five years and that's what it got from this contract so if you read that if you read the provisions of the contract very carefully it just simply does not say what the what the district court thought it may say your friend you into it with this is an option contract yes your honor i think that was that was that was heinz belief that this gave us it like a master supply agreement for a term of five years that we had the option that we could come in and week if we needed if we needed product we could get it done artist that was how heinz viewed the contract and if you needed product you wouldn't buy from anybody else  needed pride there's a specific provision that says we can self produce we can use are all the factories and that was heinz primary concern here your contract is an option contract you have to buy from right harvest unless you produce that yourself dispute before the district court the district court said pass consideration wasn't proper but the issue i try was simply is it a requirement contract or is it not and that was the issue at trial and so consequently could i could yes just run me through what i'm talking about yes ma'am quickly run you run me through that argument that you made that under onder the statute that this is not a requirement right  ok so i think there is there is some confusion about the statute the statute does not form the requirements contract it presumes that you're coming to the table with the requirements contract and if you come to the table with a requirement a contract which means exclusiv then you're looking at good faith so there is so this this is the i think the district court got this confusing mini court to do this does not form a requirement a contract and under idaho law it is exclusiv