Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca7-19-02315/USCOURTS-ca7-19-02315-0/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 

---

In the

United States Court of Appeals

For the Seventh Circuit ____________________

Nos. 19-2315 & 19-2410

ACHERON MEDICAL SUPPLY, LLC,

Plaintiff-Appellant-Cross-Appellee,

v.

COOK MEDICAL INC., et al.,

Defendants-Appellees-Cross-Appellants.

____________________

Appeals from the United States District Court for the

Southern District of Indiana, Indianapolis Division.

No. 15-cv-01510 — William T. Lawrence, Judge.

____________________

ARGUED JANUARY 16, 2020 — DECIDED MAY 6, 2020

____________________

Before FLAUM, MANION, and KANNE, Circuit Judges.

MANION, Circuit Judge. This set of cross-appeals arises 

from a distribution agreement that each party asserts the 

other breached. The district court concluded the plaintiff

breached the agreement and the defendant did not, but it also 

held the plaintiff was not liable for its breach. Neither party 

was content with the outcome. We conclude the district court 

reached the correct result, and we affirm.

Case: 19-2315 Document: 35 Filed: 05/06/2020 Pages: 23
2 Nos. 19-2315 & 19-2410

I. Background

Cook Medical, LLC (“Cook”) contracted with Acheron 

Medical Supply, LLC (“Acheron”) in July 2014. The contract—

a five-year distribution agreement—arranged for Acheron to 

serve as the exclusive distributor of certain Cook medical devices and products to the Veterans Administration (“VA”) and

Department of Defense (“DOD”) Medical Centers, and the 

non-exclusive distributor of certain other of Cook’s medical 

products to those same entities. According to Acheron’s complaint, the parties began working together because Acheron 

possessed experience selling to the VA and DOD and would 

be able to “educat[e] Cook on the government purchasing 

programs.” (Complaint, District Court Docket 1, at ¶10.) Additionally, Acheron is certified as a small business by the U.S. 

Small Business Administration, so utilizing Acheron as a distributor would potentially provide access to VA and DOD 

small business set-aside contracts.

Sales to the DOD and the VA are facilitated through Federal Award Schedules. Sales to the DOD are primarily made 

through a Distribution and Pricing Agreement (“DAPA”), 

while sales to the VA require a Federal Supply Schedule 

(“FSS”). Cook already had its own DAPA, but not an FSS; the 

agreement in part required Acheron to obtain an FSS to operate as a distributor of Cook’s products to the VA.

Unfortunately, the relationship never achieved the results

for which the parties had hoped. According to Acheron, this 

was entirely Cook’s fault, for two reasons: 1) Cook refused to 

submit to a required audit of its commercial sales records, and 

2) Cook refused to deactivate its DAPA, preventing Acheron 

from selling Cook products to the DOD through Acheron’s 

own DAPA.

Case: 19-2315 Document: 35 Filed: 05/06/2020 Pages: 23
Nos. 19-2315 & 19-2410 3

Regarding the first claim, because Acheron was a small

business without significant sales to the public, the VA would 

not provide an FSS to Acheron without first having access to 

Cook’s commercial sales records to confirm that the prices being offered by Acheron were fair and reasonable. This was required pursuant to a federal regulation that states, in relevant 

part:

If you are a dealer/reseller without significant sales to 

the general public, you should provide manufacturers’

information ... for each item/SIN offered, if the manufacturer’s sales under any resulting contract are expected to exceed $500,000. You must also obtain written authorization from the manufacturer(s) for Government access, at any time before award or before 

agreeing to a modification, to the manufacturer’s sales 

records for the purpose of verifying the information 

submitted by the manufacturer. The information is required in order to enable the Government to make a 

determination that the offered price is fair and reasonable. To expedite the review and processing of offers, 

you should advise the manufacturer(s) of this requirement.

48 CFR § 515.408(b)(5).

Cook, however, did not anticipate that it would be required to provide such extensive information about its confidential sales records. Ronald Walters, a Sales Account Executive at Cook who worked with Acheron, testified at trial “he 

was shocked to learn that it was being requested.”1 Cook alleges that Acheron led it to believe the FSS could be acquired 

1 (Appendix of Defendants/Appellees at 3.)

Case: 19-2315 Document: 35 Filed: 05/06/2020 Pages: 23
4 Nos. 19-2315 & 19-2410

using the pricing information available in Cook’s DAPA. Although Walters later signed a release at Acheron’s request allowing the VA to access Cook’s sales records, and although 

Walters twice sent emails to Acheron and officials at the VA 

indicating Cook’s willingness to undergo the audit,2 Cook ultimately declined to submit the information requested by the 

VA’s Office of Inspector General. Acheron attempted to move 

forward without Cook providing access to its sales records, 

but this proved impossible. In the end, the VA rejected Acheron’s FSS application.

When Cook informed Acheron it would not provide the 

information necessary for the VA audit, it also informed Acheron that Cook had decided not to use Acheron to sell to the 

DOD, either. Cook would instead continue to sell to the DOD 

directly through its own DAPA. Since a manufacturer can 

only be listed on one DAPA at a time, Acheron was unable to 

make any sales of Cook products to the DOD through its 

DAPA if Cook’s DAPA remained in place.

In April 2015, when Cook decided not to submit the records necessary for the VA audit and to continue making sales 

directly to the DOD, Walters sent an email to Acheron explaining these decisions and stating: “the contract remains in 

place and we will continue to consider business opportunities 

with Acheron under the terms and conditions of that 

2 Acheron does not argue the authorization letter or the emails were 

valid amendments to the Agreement with binding effect on Cook. The 

Agreement requires any modification or amendment to be “reduced to 

writing and duly executed” by both parties. The letter and emails do not 

purport to be amendments and were not signed by Acheron. See Acheron 

Medical Supply, LLC v. Cook Inc., 2017 WL 4310163, *10 & n.11 (S.D. Ind. 

Sept. 28, 2017).

Case: 19-2315 Document: 35 Filed: 05/06/2020 Pages: 23
Nos. 19-2315 & 19-2410 5

agreement.” Acheron protested. Cook sent notice in July that 

Acheron was in material breach of the Agreement by failing 

to obtain an FSS and failing to use its best efforts to promote, 

solicit, and expand the sale of Cook products. Cook terminated the agreement 30 days later due to Acheron’s failure to 

cure.

In response to Cook’s termination of the Agreement, Acheron filed suit against Cook, asserting Cook breached the 

Agreement by preventing Acheron from obtaining an FSS 

contract and preventing Acheron’s sales to the DOD. Cook asserted a counterclaim for breach of contract against Acheron.

The district court granted summary judgment against Acheron on its claims, holding Cook did not breach the Agreement because it owed no duty to undergo the VA audit or deactivate its DAPA. After holding a bench trial on Cook’s counterclaim, the court held Acheron materially breached its obligation to obtain an FSS but owed Cook no damages because 

the breach was excused by the Agreement’s force majeure

provision. Unsurprisingly, neither party was content with the

entirety of the ruling, leading to the cross-appeals we consider 

today.

II. Discussion

We review the district court’s entry of summary judgment 

de novo, resolving all reasonable inferences in favor of the nonmoving party. Barefield v. Vill. of Winnetka, 81 F.3d 704, 708 (7th 

Cir. 1996). We review the court’s legal conclusions following 

the bench trial de novo, and its factual findings for clear error. 

Rain v. Rolls-Royce Corp., 626 F.3d 372, 379 (7th Cir. 2010).

Acheron’s duty to obtain an FSS is clearly spelled out in 

the Agreement. The core issue of this case, however, regards 

Case: 19-2315 Document: 35 Filed: 05/06/2020 Pages: 23
6 Nos. 19-2315 & 19-2410

Cook’s obligations under the Agreement. Acheron argues 

Cook was obligated to submit to the VA audit and deactivate 

its DAPA. Conversely, Cook argues (and the district court 

held) the Agreement did not obligate Cook to do either. We 

examine each of these potential obligations in turn.

1. The VA Audit

There is no language in the Agreement expressly obligating Cook to submit to the VA audit. The district court recognized this, and further acknowledged that Indiana law3 “zealously defend[s] the freedom to contract.” State v. Int’l Bus. 

Machs. Corp., 51 N.E.3d 150, 160 (Ind. 2016). Indiana adheres 

to “the ‘four corners rule’ that ‘extrinsic evidence is not admissible to add to, vary or explain the terms of a written instrument if the terms of the instrument are susceptible of a 

clear and unambiguous construction.’” Roberts v. Cmty. Hosps. 

of Ind., Inc., 897 N.E.2d 458, 467 (Ind. 2008). On this basis, the 

district court held Cook did not breach the Agreement by refusing to allow access to its sales records.

Acheron asserts, however, that the district court improperly focused on common law contract principles when the 

Agreement is subject to the provisions of Indiana’s version of 

the Uniform Commercial Code (the Indiana Commercial 

Code, or “ICC”).4 In particular, Acheron argues the ICC’s 

3 The Agreement is governed by Indiana law pursuant to its choice of 

law provision.

4 The parties do not dispute that the Agreement is subject to the ICC. 

We have recognized “the rule in the majority of jurisdictions is that distributorships (both exclusive and non-exclusive) are to be treated as sale 

of goods contracts under the UCC.” See Sally Beauty Co., Inc. v. Nexxus 

Prods. Co., 801 F.2d 1001, 1005–06 (7th Cir. 1986) (collecting cases); see also 

Warrick Beverage Corp. v. Miller Brewing Co., 352 N.E.2d 496, 500 (Ind. Ct. 

Case: 19-2315 Document: 35 Filed: 05/06/2020 Pages: 23
Nos. 19-2315 & 19-2410 7

implied duty of good faith and fair dealing obligated Cook to 

undergo the VA audit. Cook also argues the prevention doctrine, federal regulations, and the election-of-remedies doctrine all compel the conclusion that Cook breached the Agreement by not submitting to the audit.

a. The Implied Duty of Good Faith

Acheron’s primary argument relies on the ICC’s implied 

duty of good faith.

Every contract governed by the ICC “imposes an obligation of good faith in its performance or enforcement.” Ind. 

Code § 26-1-1-203. The ICC defines good faith as “honesty in 

fact and observance of reasonable commercial standards of 

fair dealing in the trade.” Id. § 26-1-1-201(19). However, the 

Comment to UCC § 1-203 (from which ICC § 26-1-1-203 is 

adopted) clarifies that this implied duty of good faith “does 

not create a separate duty of fairness and reasonableness 

which can be independently breached.” Instead, it “applies 

generally ... to the performance or enforcement of every contract or duty,” so that “a failure to perform or enforce, in good 

faith, a specific duty or obligation under the contract, constitutes 

breach of that contract.” Comment to Uniform Commercial 

Code § 1-203 (emphasis added). Regarding Illinois’ version of 

§ 1-203, we have explained: “The obligation of good faith and 

fair dealing ... does not ... permit a party to enforce an obligation not present in the contract.” McArdle v. Peoria Sch. Dist. 

No. 150, 705 F.3d 751, 755 (7th Cir. 2013). Instead, where a contract grants a party discretion in performing its obligations, 

this implied duty requires that party to exercise its discretion 

App. 1976) (applying provisions of the Indiana Uniform Commercial 

Code to a distributorship agreement).

Case: 19-2315 Document: 35 Filed: 05/06/2020 Pages: 23
8 Nos. 19-2315 & 19-2410

in good faith, rather than take opportunistic advantage of the 

other party. See Wilson v. Career Educ. Corp., 729 F.3d 665, 675 

(7th Cir. 2013) (applying Illinois law) (“[T]he implied covenant of good faith is used as a construction aid to assist the 

Court in determining whether the manner in which one party 

exercised its discretion under the contract violated the reasonable expectations of the parties when they entered into the 

contract.”). 

There is unfortunately very little Indiana precedent interpreting or applying the ICC’s duty of good faith. However, 

Acheron relies heavily on a Seventh Circuit case in which we 

applied another provision of the ICC. In Biomet Orthopedics,

Inc. v. TACT Med. Instruments, Inc., 454 F.3d 653 (7th Cir. 2006), 

the parties entered an agreement under which TACT would 

distribute Biomet’s products in Japan. The agreement provided TACT could require Biomet to repurchase the remaining inventory at the end of the distributorship and required 

Biomet to pay for any delivery cost, but it did not specify 

whether the inventory would be shipped back to the United 

States or delivered to Biomet in Japan. TACT chose to ship the 

inventory back to the United States, despite Biomet’s request 

for delivery in Japan. This cost Biomet a substantial amount 

in customs duties and greatly delayed its ability to compete 

in the Japanese market. Id. at 654.

We looked to the ICC’s provision for determining place of 

delivery when the contract is silent on that point. Id. at 655 

(quoting Ind. Code §§ 26-1-2-308, 26-1-2-504). The ICC imposed a duty on TACT either to make the inventory available 

at its own place of business or to “make reasonable provision 

for delivery.” Id. The jury’s finding that TACT’s shipment of 

the inventory back to the United States was not reasonable 

Case: 19-2315 Document: 35 Filed: 05/06/2020 Pages: 23
Nos. 19-2315 & 19-2410 9

was well supported by the evidence and commercial norms. 

Id. Acheron cites Biomet to support its contention that the ICC 

required Cook to act reasonably and therefore obligated Cook 

to undergo the necessary audit.

Biomet does not support Acheron’s argument. First, Biomet

was based on a much more specific gap-filling provision of 

the ICC, and second, that provision only clarified the undecided details of a duty expressly contemplated by the agreement.

To the first point: Biomet dealt with a very specific ICC provision that requires reasonable provision for delivery to be 

made when the parties’ agreement is silent on that point. That 

provision specifically addresses the gap the Biomet parties left 

in their contract: place of delivery. It also gives specific guidance on how to fill that gap: in the case of silence, the seller 

must either make the goods available at its place of business 

or make reasonable provision for shipment. Biomet had already agreed to repurchase the inventory and to pay for delivery. Only the place of delivery remained uncertain, and the 

ICC provision was expressly created to fill that gap. By contrast, Acheron is relying only on the ICC’s general implied 

duty of good faith. This is not a specific provision written to 

address a circumstance in which the contract is silent on a specific term.

Second, the ICC did not require TACT to undertake an affirmative duty not provided for in the parties’ agreement. It 

was already agreed by the parties that in the event of a repurchase TACT would make delivery in some form and Biomet 

would bear the costs. The only item left uncertain by the 

agreement was where that delivery would be made. Conversely, the Agreement in this case included no obligation for 

Case: 19-2315 Document: 35 Filed: 05/06/2020 Pages: 23
10 Nos. 19-2315 & 19-2410

Cook to make its confidential sales records available to the 

VA.5 This is a far cry from the contract in Biomet that expressly 

contemplated delivery but simply never specified where it 

would occur.

In an effort to identify a specific duty within the Agreement through which the duty of good faith and fair dealing 

would require Cook to undergo the audit, Acheron points to 

the Agreement’s force majeure provision. The Agreement 

states that neither party may be liable for a delay or default 

caused by force majeure, including, without limitation 

... act of government or ... agency .... The party affected by such a condition shall use every possible effort to correct or eliminate the cause which prevents 

performance and resume performance as soon as possible.

5 Although the district court found Cook “had not anticipated that it 

would have to provide the extensive information required by the VA,”

Acheron argues Cook reasonably should have known when entering the 

Agreement that providing the VA with access to its sales records would 

be necessary because the requirement was spelled out in the VA’s regulations and on its website. Acheron’s own pleadings, however, acknowledged that the parties negotiated the Agreement in part because Acheron 

represented it possessed knowledge and experience in government contracts processes and would be able to educate and help Cook enter that 

market. In Acheron’s own words: “the processes of [the VA and DOD] are 

difficult for a vendor to navigate absent familiarity with them. Acheron 

offered that familiarity and the consequent opportunity to facilitate sales 

of Cook’s medical products to the DOD and VA by educating Cook on the 

government purchasing programs.” (Complaint, District Court Docket 1, 

at ¶10.) Acheron should have known better than to leave the important 

detail of the VA audit off the negotiation table.

Case: 19-2315 Document: 35 Filed: 05/06/2020 Pages: 23
Nos. 19-2315 & 19-2410 11

(District Court Docket 1-1, at 9.) Acheron asserts the VA’s denial of the FSS was a force majeure event, and therefore this 

provision required Cook to act in good faith and take all reasonable steps—including submitting to the VA audit—to help 

Acheron overcome that obstacle.

But the provision requires the party affected by a force 

majeure condition to use every reasonable effort to correct or 

eliminate the cause. Acheron contends both Cook and Acheron were “affected” by the VA’s refusal to award an FSS, 

since this refusal prevented Acheron from performing which 

in turn prevented the object of the Agreement from being realized. However, every instance of a force majeure preventing 

one party from performing its obligations will “affect” both 

parties in the sense that it prevents the contract from being 

performed. Since the parties specifically chose to limit the obligation in the force majeure provision to “the party affected,”

we must assume they intended the party whose performance 

is directly prevented by the event. The plain language of the 

provision forecloses Acheron’s argument to the contrary, 

without even reaching the question of whether “all reasonable steps” would include Cook submitting to the VA audit.

In short, the duty of good faith requires that a party perform its obligations and exercise its discretion under the contract in good faith. But it does not require a party to undertake 

a new, affirmative obligation that the party never agreed to 

undertake. No part of the Agreement, including the force 

majeure provision, obligates Cook to undergo an audit of its 

confidential sales records. As such, Cook did not breach the 

implied duty of good faith by refusing to do so.

Case: 19-2315 Document: 35 Filed: 05/06/2020 Pages: 23
12 Nos. 19-2315 & 19-2410

b. The Prevention Doctrine

Acheron also argues the common law prevention doctrine 

compels a decision in its favor. Indiana courts have recognized the prevention doctrine, under which a party’s performance may be excused “where the other party wrongfully 

prevents that performance.” Rogier v. Am. Testing & Eng’g 

Corp., 734 N.E.2d 606, 620 (Ind. Ct. App. 2000); see also Stephenson v. Frazier, 399 N.E.2d 794, 798 (Ind. Ct. App. 1980). The 

Indiana cases discussing this doctrine reveal two related applications: (1) a party who breaches a contract may not “take 

advantage of his breach to relieve him of his contractual obligations,” Rogier, 734 N.E.2d at 620; Stephenson, 399 N.E.2d at

798, and (2) a party who prevents the fulfillment of a condition precedent on which that party’s obligation was dependent may not rely on the failure of that condition to avoid its 

obligations, Rogier, 734 N.E.2d at 621. The Restatement (Second) of Contracts § 245 summarizes this doctrine as follows: 

“Where a party’s breach by non-performance contributes materially to the non-occurrence of a condition of one of his duties, the non-occurrence is excused.”

The prevention doctrine does not apply here for two reasons. First, this case does not involve a prevented condition 

precedent, because the Agreement does not explicitly state 

that Acheron’s obtaining an FSS was a condition precedent to 

Cook’s performance. A condition precedent is “a condition 

which must be satisfied before an agreement becomes enforceable or a condition which must be fulfilled before the 

duty to perform an already existing contract arises.” Sand 

Creek Country Club, Ltd. v. CSO Architects, Inc., 582 N.E.2d 872, 

875 (Ind. Ct. App. 1991). Under Indiana law, conditions precedent are “generally disfavored and must be stated explicitly 

Case: 19-2315 Document: 35 Filed: 05/06/2020 Pages: 23
Nos. 19-2315 & 19-2410 13

within the contract.” Sasso v. Warsaw Orthopedic, Inc., 45 

N.E.3d 835, 840 (Ind. Ct. App. 2015). Further, “[w]hen the required action to be taken is an integral part of the contract, it 

is not a condition precedent.” Id. The Agreement does not explicitly condition its enforceability or any of Cook’s obligations on the award of the FSS. Instead, Acheron’s duty to obtain an FSS is an integral part of the Agreement. It is not a 

condition precedent.

Second, as explained in the previous section, Cook did not 

breach the Agreement by refusing to submit to the VA audit

because it was not obligated to do so. Acheron’s assertion that 

Cook “wrongfully prevented” Acheron from performing its 

obligation begs the question of Cook’s obligation to submit to 

the audit. “The doctrine of prevention as an excuse for nonperformance of a contractual duty is inapplicable when the 

conduct alleged to have prevented performance was permissible under the express or the implied terms of the contract.”

13 Williston on Contracts § 39:11 (4th ed.). This conclusion is 

further supported by the comment to Restatement (Second) 

of Contracts § 245: “The rule stated in this Section only applies, however, where the lack of cooperation constitutes a 

breach, either of a duty imposed by the terms of the agreement itself or of a duty imposed by a term supplied by the 

court.” Acheron argues the duty of good faith provides the 

necessary “duty imposed by a term supplied by the court,”

but as we have already discussed, the duty of good faith does 

not suffice here.

This case does not present a scenario in which one party 

actively sought to sabotage the other party’s performance to 

escape its own obligations or obtain an unfair advantage. Instead, the parties failed to come to an agreement about an 

Case: 19-2315 Document: 35 Filed: 05/06/2020 Pages: 23
14 Nos. 19-2315 & 19-2410

important aspect of the FSS approval process. We decline to 

infer an agreement on Cook’s part to undergo the audit.

c. Compliance with Federal Regulations

Acheron next contends that applicable federal regulations 

obligated Cook to submit to the VA audit. As Acheron points 

out, unless a contract provides otherwise, “all applicable law 

in force at the time the agreement is made impliedly forms a 

part of the agreement without any statement to that effect.”

Miller v. Geels, 643 N.E.2d 922, 928 (Ind. Ct. App. 1994). Acheron additionally relies on what is known as the Christian doctrine, under which relevant federal regulations are incorporated as a matter of law into federal contracts.

When a reseller without significant sales to the general 

public petitions to obtain an FSS, the VA requires access to the 

manufacturer’s commercial sales records to confirm its pricing. Accordingly, federal regulation requires such a reseller to 

obtain written authorization from the manufacturer for the 

VA to access the manufacturer’s sales records. 48 CFR 

§ 515.408(b)(5). The regulation also states the reseller “should 

advise the manufacturer(s) of this requirement.” Id. Acheron 

argues this regulation was incorporated into the Agreement, 

creating an obligation on Cook to undergo the audit. For its 

part, Acheron sought and obtained a letter, signed by Walters, 

granting permission to the VA to access Cook’s sales records.

This letter did not amount to a valid amendment or modification of the Agreement. According to Acheron, however, since 

it fulfilled its obligation under § 515.408(b)(5) to obtain written permission, Cook was then obligated by the same regulation to honor the authorization letter and submit to the audit.

Case: 19-2315 Document: 35 Filed: 05/06/2020 Pages: 23
Nos. 19-2315 & 19-2410 15

Regardless of whether Acheron properly sought written 

authorization, the regulation does not place any obligation on 

Cook to undergo the audit. As the district court correctly held, 

the regulation governs only the relationship between the reseller and the VA, not the manufacturer. If anything, the regulation’s requirement that the reseller obtain written authorization and its recommendation that the reseller “advise the 

manufacturer” of the audit requirement emphasizes why 

Acheron should have ensured the Agreement expressly obligated Cook to provide access to its confidential sales records.

Acheron did not do this, however, and the Agreement does 

not include any such obligation. Section 515.408(b)(5) does 

not suffice to imply one.

d. Election of Remedies

Finally, Acheron argues Cook forfeited its right to terminate the Agreement by choosing to keep the contract in force, 

citing the “election-of-remedies” doctrine. Acheron also cites

the equitable principles of waiver, estoppel, and modification 

to the same end.

Under the contractual election-of-remedies doctrine to 

which Acheron refers, when a breach by one party allows the 

non-breaching party to terminate the agreement, but the nonbreaching party elects instead to continue accepting performance from the breaching party, then the non-breaching 

party has re-affirmed the contract and forfeits its right to terminate that contract. See Restatement (First) of Contracts 

§ 309. Waiver comes into play where a party’s conduct manifests an intent to waive a known right. Ogle v. Wright, 360 

N.E.2d 240, 245 (Ind. Ct. App. 1977). Estoppel may be invoked 

when one party misleads the other party into believing a right 

will not be enforced, causing that party to act to his detriment.

Case: 19-2315 Document: 35 Filed: 05/06/2020 Pages: 23
16 Nos. 19-2315 & 19-2410

Saverslak v. Davis-Cleaver Produce Co., 606 F.2d 208, 213 (7th 

Cir. 1979). Finally, modification refers to parties mutually 

agreeing to modify their contract. City of Indianapolis v. Twin 

Lakes Enters., Inc., 568 N.E.2d 1073, 1084 (Ind. Ct. App. 1991).

Soon after the VA denied Acheron’s FSS petition, Walters 

sent an email to Acheron explaining Cook had decided not to 

submit to the VA audit. In that same email, Walters stated “the 

contract remains in place and we will continue to consider 

business opportunities with Acheron under the terms and 

conditions of that agreement.” Acheron Medical Supply Co., 

2017 WL 4310163, at *5. The district court rejected Acheron’s

argument that this statement represented Cook’s re-affirmance of the contract despite the breach. The court found 

that, without an FSS or DAPA sales, there was nothing left to 

be accomplished by the Agreement, and therefore Walter’s 

statement that “the contract remains in place” was meaningless.

Acheron correctly points out the district court erred by 

concluding there was no longer any business to be conducted 

without an FSS. Walters testified in his deposition the contract 

could still govern transactions of business through other government contract vehicles and other forms of business with 

the VA. The FSS was only one contract vehicle through which 

the Agreement gave Acheron the right to resell Cook Medical’s products, as seen on the Commission Schedule attached 

as Exhibit A to the Agreement. (District Court Docket 68-3, at 

15.) Cook does not argue otherwise.

Furthermore, Cook improperly focuses its response on Indiana’s judicial election-of-remedies doctrine, missing the 

point of Acheron’s contractual election-of-remedies argument. 

Cook argues Indiana law allows a party to pursue separate 

Case: 19-2315 Document: 35 Filed: 05/06/2020 Pages: 23
Nos. 19-2315 & 19-2410 17

and contradictory claims in litigation so long as the party does 

not pursue one to completion and then pursue a subsequent, 

inconsistent remedy. See Hoover v. Hearth & Home Design Ctr., 

Inc., 654 N.E.2d 744, 745 (Ind. 1995). That principle has no 

bearing on whether a party who has affirmed a contract despite the other party’s breach and continued to accept performance may later reverse course and sue for breach. Acheron’s 

argument raises the latter question.

However, the district court also pointed out Acheron’s 

election-of-remedies argument relied solely on citations to 

non-Indiana cases and the Restatement of Contracts, without 

any authority demonstrating Indiana has adopted that doctrine (or to what extent it has done so). Acheron’s principal 

brief acknowledges this part of the district court’s holding yet 

still fails to provide any Indiana case law adopting or applying the doctrine. Acheron makes no argument why we, bound 

to apply Indiana law in this case, should assume Indiana follows this rule without any supporting case law.

In any event, there is no genuine dispute that Walters, 

merely a “sales account executive” at Cook, was not an officer 

with authority to speak or act on Cook’s behalf. The record 

contains no support for the conclusion that Walters had the 

authority to bind Cook to a course of action, to affirm the contract, to modify the contract, or to waive Cook’s right to terminate the contract. Accordingly, the district court properly 

rejected Acheron’s argument that Cook affirmed the contract 

despite Acheron’s breach, as well as its arguments for waiver, 

estoppel, and modification.

Case: 19-2315 Document: 35 Filed: 05/06/2020 Pages: 23
18 Nos. 19-2315 & 19-2410

2. Deactivation of Cook’s DAPA

Acheron also argues Cook breached the Agreement by 

continuing to make direct sales to the DOD and refusing to 

deactivate its DAPA, inhibiting Acheron from making sales to 

the DOD through its own DAPA. The district court held this 

was not a breach, because the Agreement only appointed Acheron as an exclusive agency for DOD distribution and no term 

in the Agreement prevented Cook, the principal, from making 

direct sales. The court also noted the Agreement contemplated 

continued direct sales by providing for commissions to be 

paid to Acheron on these direct sales.

Acheron makes three main arguments on appeal. First, it 

argues Cook Medical is itself the distribution arm of its sister 

company, Cook Incorporated, and therefore Acheron’s exclusive distributorship prevents Cook Medical from acting as a 

distributor of Cook Incorporated. Second, Acheron argues the 

district court misinterpreted the provision allowing Cook to 

continue making direct sales to the DOD, which is only permissible under limited circumstances. Finally, Acheron argues not implying an obligation on Cook to deactivate its 

DAPA effectively reads out of the contract Acheron’s appointment as a distributor and denies Acheron the benefit of its bargain.

The argument that Cook Medical is itself a distributor is 

creative, but fails nonetheless. Acheron admits Cook Incorporated was not a signatory to the Agreement; Cook Medical 

was. All references in the Agreement to “COOK” refer to 

Cook Medical. Thus, regardless of the exact organizational relationships between the various arms of Cook’s overall enterprise, the Agreement contemplates an exclusive agency 

through which Acheron is appointed as Cook Medical’s 

Case: 19-2315 Document: 35 Filed: 05/06/2020 Pages: 23
Nos. 19-2315 & 19-2410 19

exclusive distributor. Acheron’s argument could only hold 

water if the Agreement appointed it as Cook Incorporated’s exclusive distributor. It does not.

Next, Acheron argues a proper interpretation of the 

Agreement only allowed Cook to make direct sales under limited circumstances. Those circumstances, according to Acheron, allowed direct sales to the VA on particular product 

lines while the parties awaited an FSS application for that 

product line to be approved. It was only those sales, Acheron 

contends, that Cook was permitted to make while the FSS approval process was ongoing and would entitle Acheron to a 

3% commission.

This interpretation, however, is simply not supported by 

the plain language of the Agreement. The Agreement clearly 

allows Cook to make direct sales in “the Territory” (defined 

as including both the VA and the DOD) both during the anticipated FSS approval period (between March 1, 2014 and the 

end of 2014) as well as after an FSS was in place for the products being sold. (District Court Docket 1-1, at 5.) No language 

in the Agreement places the kinds of limits upon direct sales 

that Acheron argues it does. The district court correctly held 

the Agreement contemplates continued direct sales by Cook.

Finally, Acheron argues an obligation for Cook to deactivate its own DAPA must be implied, or else Acheron’s appointment as Cook’s distributor is rendered a nullity and 

Acheron is deprived of the benefit of its bargain. This is essentially the same argument we rejected regarding an implied 

duty for Cook to undergo the VA audit. Deactivation of 

Cook’s DAPA to allow for sales through Acheron’s DAPA 

was undoubtedly an important term the parties should have 

negotiated and included in their Agreement, but they did not. 

Case: 19-2315 Document: 35 Filed: 05/06/2020 Pages: 23
20 Nos. 19-2315 & 19-2410

Once again, as the party touting its experience and knowledge 

of government contracts, Acheron should have ensured Cook 

understood the need and agreed to deactivate its DAPA. The 

Agreement places no such obligation on Cook, but instead expressly allows for Cook to continue direct sales so long as a 

commission is paid.

Furthermore, the lack of an obligation on Cook to deactivate its DAPA does not render Acheron’s appointment as exclusive distributor meaningless, nor does it deprive Acheron 

of the benefit of its bargain. Even without Cook deactivating 

its DAPA, Acheron would be able to distribute Cook’s products to the VA and through other contract vehicles, and Acheron was also entitled to and did receive commissions for all 

of Cook’s direct sales to the DOD. That was the benefit for 

which Acheron bargained, and the benefit it received.

In sum, the Agreement did not obligate Cook either to submit to the VA audit or deactivate its DAPA. The district court 

properly held Cook did not breach the Agreement, and therefore Acheron’s failure to obtain an FSS was a material breach 

of the Agreement.

3. Acheron’s Liability

Having established Acheron breached the Agreement by 

failing to obtain an FSS, we turn to the final issue on appeal: 

whether Acheron owed damages for that breach. In its counterclaim against Acheron, Cook sought damages in the 

amount of the commissions it paid to Acheron for direct sales 

made to the VA during the period Acheron was seeking the 

FSS award. The district court held after the bench trial that 

Acheron’s liability was excused by the Agreement’s force 

majeure provision. The court also held the commissions were 

Case: 19-2315 Document: 35 Filed: 05/06/2020 Pages: 23
Nos. 19-2315 & 19-2410 21

paid to Acheron as consideration for Acheron’s work in pursuit of the FSS award; they were not conditioned on Acheron’s 

eventual procurement of an FSS. Cook appeals both holdings. 

Since we hold the force majeure provision completely absolves Acheron of liability for the breach, we do not need to 

address the second holding.

As explained previously, the Agreement’s force majeure 

provision provides neither party 

shall be liable for any delay or default caused by force 

majeure, including, without limitation ... act of government or ... agency. The party affected by such a 

condition shall use every reasonable effort to correct or 

eliminate the cause which prevents performance and 

resume performance as soon as possible. 

(District Court Docket 1-1, at 9.) Acheron’s breach was undeniably caused by an act of a government agency (the VA’s denial of the FSS award), and Acheron used every reasonable 

effort to correct or eliminate that cause (by attempting to obtain Cook’s authorization for the audit, and by offering other 

sources of pricing information to the VA). Nevertheless, the 

force majeure remained.

Cook argues the denial of the FSS award due to Cook’s refusal to submit to the VA audit was not a true force majeure 

because it was foreseeable (to Acheron, at least). Cook points 

to the fact that the applicable regulations and the VA website 

made clear that an audit would be necessary, and thus Acheron—the party touting its experience with and knowledge of

the government contracts purchasing process—should have 

reasonably expected to encounter this roadblock, even though 

Cook did not.

Case: 19-2315 Document: 35 Filed: 05/06/2020 Pages: 23
22 Nos. 19-2315 & 19-2410

But the question of whether the audit was foreseeable is irrelevant to the application of the force majeure provision. The 

event that prevented Acheron from performing was not the 

VA’s request to complete an audit of Cook’s sales records. Rather, it was the VA’s denial of the FSS award, precipitated by 

Cook’s refusal to submit to the audit. Even if Acheron could

reasonably expect the VA would require a commercial sales 

audit, that does not mean Acheron should have reasonably

foreseen circumstances would result in the VA denying the 

FSS award. Thus, the VA’s denial of the FSS qualifies as a force 

majeure event outside both parties’ anticipation6 and certainly Acheron’s control. The force majeure provision excuses

Acheron of any liability.

III. Conclusion

In summary, the district court correctly held Cook had no 

obligation to submit to the VA audit or deactivate its DAPA. 

It also correctly held Acheron breached the Agreement by not 

obtaining the FSS but was not liable for that breach due to the 

6 We further note the provision nowhere requires the force majeure 

event be unforeseen, nor does it reference foreseeability at all. Cook cites 

the definition of “force majeure” as an event that can be neither anticipated nor controlled, but the Indiana Court of Appeals has held “the scope 

and effect of a force majeure clause depends on the specific contract language, and not on any traditional definition of the term.” Specialty Foods of 

Indiana, Inc. v. City of South Bend, 997 N.E.2d 23, 27 (Ind. Ct. App. 2013). In 

that case, the court held a force majeure clause “contain[ing] nothing 

about foreseeability” was intended to apply regardless of whether the parties could have reasonably foreseen the event that precluded performance. 

Id. at 27. However, because we hold the force majeure provision applies 

even assuming the event had to be unforeseen, we need not analyze further whether the force majeure in this case required foreseeability.

Case: 19-2315 Document: 35 Filed: 05/06/2020 Pages: 23
Nos. 19-2315 & 19-2410 23

force majeure provision. Accordingly, the judgment of the 

district court is AFFIRMED.

Case: 19-2315 Document: 35 Filed: 05/06/2020 Pages: 23