### In the



# United States Court of Appeals

For the Seventh Circuit

____________________

No. 17

‐ 2783

BRC R UBBER & P LASTICS

, I NCORPORATED

, an Indiana

corporation,

Plaintiff

‐ Appellant

,

v.

C ONTINENTAL C ARBON C OMPANY

, a

Delaware corporation,

Defendant

‐ Appellee

.

____________________

Appeal from the United States District Court for the

Northern District of Indiana, Fort Wayne Division.

No. 1:11

‐ cv

‐ 00190

‐ SLC

— Susan L. Collins

, Magistrate Judge

.

____________________

A RGUED F EBRUARY 21, 2018

— D ECIDED A UGUST 16, 2018

____________________

Before R IPPLE

, K ANNE

, and H AMILTON

, Circuit Judges

.

R IPPLE

, Circuit Judge

. This case involves a contract dispute

over the sale and purchase of carbon black, an important in

‐ gredient in rubber products. BRC Rubber & Plastics, Inc.

(“BRC”) seeks to recover from Continental Carbon Co.

(“Continental”) costs that it incurred in purchasing carbon2 No. 17

‐ 2783

black from another supplier following Continental’s alleged

repudiation of the parties’ supply agreement.

Initially, BRC claimed that the agreement was a require

‐

ments contract, i.e.

, a supply agreement in which Continental

promised to provide all of the carbon black that BRC re

‐ quired. Because Continental failed to do so, the district court

awarded summary judgment to BRC.

In a prior appeal, we rejected the characterization of the

agreement as a requirements contract and, therefore, vacated

the judgment. In remanded proceedings, BRC, without

amending its complaint, pursued the alternative theory that

the agreement is for the supply of a fixed amount of carbon

black. The district court granted summary judgment to Con

‐

tinental for two reasons: BRC’s complaint failed to state a

claim for relief under any theory of the agreement other than

as a requirements contract; in the alternative, the agreement

is unenforceable for a lack of mutuality and consideration.

BRC now appeals. For the reasons set forth in this opin

‐

ion, we conclude that the parties’ agreement is enforceable

and that BRC can proceed on its alternative characterization

of the contract as an agreement for a fixed amount of carbon

black. We, therefore, reverse and remand the case for pro

‐ ceedings consistent with this opinion.

I

BACKGROUND

A.

BRC produces rubber

‐ based products for the automotive

industry. Continental is a supplier of carbon black, a rawNo. 17

‐ 2783 3

material that is a key ingredient in rubber products. On Jan

‐

uary 1, 2010, BRC and Continental entered into a five

‐ year

agreement (the “Agreement”). Under its terms, Continental

“agree[d] to sell to [BRC] approximately 1.8 million pounds

of prime [carbon] black annually

... to be taken in approxi

‐ mately equal monthly quantities.” 1 The Agreement set out

baseline prices for three different grades of carbon black

(N339, N550, and N762) and stated that those prices were “to

remain firm throughout the term.” 2 In return, Continental

obtained the right to review and meet any better offers that

BRC received during the term. 3

In 2010, Continental shipped 2.6 million pounds of car

‐

bon black to BRC. Shipments continued regularly into mid

‐

2011, with Continental providing more than one million

pounds by the spring of 2011. However, in March 2011, de

‐

mand for carbon black began to exceed Continental’s ability

to produce it. In April 2011, Continental notified all of its

buyers that the N762 grade of carbon black would be una

‐

vailable in May due to plant outages and lack of inventory.

BRC nonetheless placed an order for 360,000 pounds of car

‐

bon black, including N762, for delivery in the coming weeks.

1 R.6

‐ 1 at 1.

2 Id.

3 This obligation appears in the “Meet or Release” provision, which

reads: “If during the term of this agreement BRC receives an offer that

they believe is better tha[n] the terms offered in this agreement[,] Conti

‐

nental Carbon will have the right to meet this agreement or release BRC

from any further obligation. Continental Carbon has the right to review

the actual written offer. Only offers made in writing will be considered.”

Id.4 No. 17

‐ 2783

The parties dispute the nature of their communications

during this period. In mid

‐ April 2011, a Continental sales

representative emailed BRC’s Vice President of Purchasing

seeking to increase the baseline prices of carbon black by

$.02 per pound. BRC rejected this request, citing the “firm”

prices set out in the Agreement. In late April, the same Con

‐

tinental representative informed BRC that Continental might

withhold shipments from BRC. Continental does not deny

that this communication occurred but maintains that the

representative, who was about to be terminated from the

company, delivered a false message.

Given Continental’s limited inventory and obligations to

other customers, it neither confirmed BRC’s last order nor

shipped the requested carbon black. BRC’s counsel then sent

a letter to Continental, dated May 16, 2011, demanding im

‐

mediate shipment of the unfulfilled order and immediate

assurance that Continental would uphold its end of the bar

‐ gain in the future. Continental responded that it did “not

have N762 available at the moment.” 4 As a result, on May

18, 2011, BRC purchased one railcar’s worth of N762 from

another supplier at a higher price than set forth in the

Agreement.

Two days later, Continental offered to ship BRC multiple

railcars of carbon black at price increases up to $.06 per

pound. Continental claims that this offer mistakenly quoted

higher prices than the Agreement. When BRC refused to pay

higher prices, a Continental Director suggested that BRC

4 R.6 at 4.No. 17

‐ 2783 5

“call another supplier.” 5 Continental maintains that this re

‐

sponse was based on a misunderstanding. Indeed, within

hours, counsel for both parties conferred and Continental’s

attorney sent an email to BRC stating that Continental would

“continue producing and shipping timely at the contract

prices, and would not cut off supply to BRC.” 6

Later that same day, BRC sought further confirmation as

to when Continental would fulfill BRC’s outstanding order.

Continental responded, “we will ship one car next week and

do the best we can re future orders based on our intent to

supply 1.8 million lbs.” 7 BRC requested a status update three

days later, and Continental gave a similar response.

On the next business day, BRC again inquired about the

status of its order, and Continental said that it would ship

one railcar of carbon black the following day. At this point,

Continental emphasized that the Agreement required it to

supply only 1.8 million pounds per year—or approximately

150,000 pounds per month—and that it already had shipped

1.2 million pounds that year—or approximately 300,000

pounds per month. Continental shipped one railcar of car

‐

bon black to BRC the next day. Within a week, Continental

emailed BRC seeking to increase the baseline prices again

and to accelerate the payment terms in the Agreement. On

June 2, 2011, BRC filed this lawsuit. 8

5 Id. at 5.

6 Id.

7 Id.

8 Following the initiation of this lawsuit, Continental continued to sup

‐ ply carbon black to BRC at the contract prices until September 2011. Dur

‐ (continued

... )6 No. 17

‐ 2783

B.

BRC’s complaint sets out three counts. It alleges: (1) that

Continental breached the Agreement by refusing to supply

BRC with its requirements of carbon black at the prices and

terms set forth in the Agreement; (2) that BRC is entitled to a

declaration that Continental is obligated to provide BRC

with its requirements of carbon black pursuant to the terms

of the Agreement; and (3) that Continental anticipatorily re

‐ pudiated the Agreement by failing to provide assurances

about its future performance. 9 In the third and final count,

BRC relies upon sections 26

‐ 1

‐ 2

‐ 610 and 26

‐ 1

‐ 2

‐ 712 of the In

‐

diana Code, which govern, respectively, “[a]nticipatory

[r]epudiation” and “[c]over” for a “buyer’s procurement of

substitute goods.” Ind. Code §§ 26

‐ 1

‐ 2

‐ 610, 26

‐ 1

‐ 2

‐ 712. The

complaint refers to the Agreement as a “requirements con

‐

tract” multiple times. 10

Prior to discovery, the parties filed cross

‐ motions for

summary judgment based on competing interpretations of

the Agreement. Continental contended that the Agreement

(

... continued)

ing that time, the parties attempted to reach a resolution. However, in

September 2011, BRC ceased ordering carbon black from Continental

and entered into a three

‐ year agreement with another supplier at prices

exceeding those in the contract by $.11 to $.15 per pound. Continental

ultimately provided more than 1.8 million pounds of carbon black to

BRC at contract prices in 2011.

9 The district court’s jurisdiction was premised on the diversity statute,

28 U.S.C. § 1332. The parties are citizens of different states, and BRC

seeks well over $75,000 in damages.

10 R.6 at 2, 5.No. 17

‐ 2783 7

is merely an open offer for orders—not a binding contract—

and that Continental, therefore, could not have breached it

by repudiation or otherwise. In the alternative, Continental

argued that the Agreement is a contract to sell a specific

quantity of carbon black rather than a requirements contract.

BRC maintained that the Agreement is a requirements con

‐

tract, or an agreement by which Continental promised to

supply all of BRC’s requirements for carbon black during the

term. According to BRC, Continental had repudiated the

Agreement by failing to satisfy BRC’s order, as well as by

sending equivocal messages about the satisfaction of future

orders and by demanding higher prices and accelerated

payment terms.

The district court applied Indiana law and concluded

that the Agreement is a requirements contract. 11 Although it

granted partial summary judgment to BRC on that ground,

the court denied summary judgment on the questions of

breach and anticipatory repudiation. The parties continued

with discovery, and BRC later moved for summary judg

‐

ment on the question of liability. The court again ruled in

BRC’s favor; it found that Continental had repudiated the

Agreement by refusing to supply all of BRC’s requirements

and by failing to provide assurances of continued perfor

‐

mance. After granting summary judgment on liability, the

court conducted a bench trial on damages. It awarded BRC

11 As a federal court sitting in diversity, the district court applied the

substantive law of the forum state: Indiana. See Land v. Yamaha Motor

Corp., U.S.A.

, 272 F.3d 514, 516 (7th Cir. 2001).8 No. 17

‐ 2783

$982,643.11 based on the “cover” that BRC had purchased

from other suppliers through June 30, 2013. 12

Continental appealed the final judgment to this court. 13 It

challenged the district court’s interpretation of the Agree

‐

ment as a requirements contract, emphasizing that the

Agreement does not obligate BRC to buy any amount of car

‐

bon black, let alone all of its required carbon black, from

Continental. We agreed with this reasoning and vacated the

district court’s judgment. See BRC Rubber & Plastics, Inc. v.

Cont’l Carbon Co.

, 804 F.3d 1229, 1233 (7th Cir. 2015). We did

not address the questions of breach or repudiation. Rather,

given that the prior “judgment against Continental was

premised on the agreement being a requirements contract,”

we remanded the case for further proceedings. Id.

On remand, the district court ordered the parties to sub

‐

mit new cross

‐ motions for summary judgment in light of our

decision. Continental argued that BRC’s claims now fail as a

matter of law because if the Agreement is not a requirements

contract, it must be an unenforceable “buyer’s option” that

lacks mutuality and consideration. 14 Continental also

claimed that the Agreement is unenforceable because it lacks

essential terms, particularly a precise quantity of total carbon

black and of each grade of carbon black. It further argued, in

the alternative, that even if the Agreement is enforceable,

Continental had upheld its end of the bargain by supplying

12 R.110 at 14, 20.

13 BRC cross

‐ appealed an issue related to damages, which is irrelevant to

the present appeal.

14 R.156

‐ 1 at 11.No. 17

‐ 2783 9

BRC with 1.35 million pounds of carbon black by June 2011,

and by assuring BRC that it would provide the remainder of

1.8 million pounds by the end of the year.

In its cross

‐ motion for summary judgment, BRC con

‐

tended that our earlier decision “does not change the validi

‐

ty of the Supply Agreement as a valid or enforceable con

‐

tract, its breach by Continental, or BRC’s entitlement to

damages.” 15 From BRC’s perspective, even if the Agreement

is not a requirements contract, it is nonetheless an “enforce

‐

able agreement requiring Continental to sell at least 1.8 mil

‐

lion pounds of carbon black annually to BRC.” 16 Therefore,

BRC claimed, Continental anticipatorily repudiated the

Agreement when it failed to fulfill BRC’s order, demanded

higher prices and accelerated payment terms, and sent

equivocal messages about its intent to provide even 1.8 mil

‐

lion pounds per year. BRC maintained that under its admit

‐ tedly revised theory of the contract, it still was entitled to

cover its damages and seek reimbursement from Continen

‐

tal.

The district court granted summary judgment to Conti

‐

nental. It held that BRC’s claims fail as a matter of law be

‐

cause they are “premised entirely on the Supply Agreement

being a requirements contract.” 17 The court reasoned that

“BRC’s claims in its amended complaint do not allege any

alternative theory of the contract under which it could re

‐

15 R.168 at 2.

16 Id

.

17 R.173 at 9.10 No. 17

‐ 2783

cover any damages from Continental.” 18 The court also

ruled, in the alternative, that the Agreement is an unenforce

‐

able “buyer’s option” because it lacks the requisite mutuality

and consideration. 19 Given these holdings, both of which are

independently dispositive, the court did not reach the ques

‐

tions of breach or repudiation.

BRC then brought this appeal. It challenged both of the

district court’s holdings. For the reasons set out in some de

‐

tail in the following paragraphs, we now reverse the district

court’s judgment. The Agreement does not fail for lack of

consideration or mutuality; it is an enforceable contract. Fur

‐

thermore, BRC’s claims do not fail as a matter of law. BRC

was permitted to change its legal theory following our pre

‐

vious remand, and the factual allegations in its complaint are

sufficient to state a claim under its revised construction of

the Agreement.

II

DISCUSSION

We review the district court’s decision on summary

judgment de novo. E.T. Prods., LLC v. D.E. Miller Holdings,

Inc.

, 872 F.3d 464, 467 (7th Cir. 2017). Summary judgment is

proper when the moving party shows that there is no genu

‐

ine dispute as to any material fact and that it is entitled to

judgment as a matter of law. Fed. R. Civ. P. 56(a). When rul

‐ ing on a motion for summary judgment, we, like the district

18 Id. at 10.

19 Id. at 15.No. 17

‐ 2783 11

court, view the record in the light most favorable to the

nonmoving party; if a reasonable factfinder could return a

verdict in favor of that party, the motion must be denied.

Payne v. Pauley

, 337 F.3d 767, 770 (7th Cir. 2003).

A.

We begin with the district court’s holding that the

Agreement is unenforceable for lack of mutuality and con

‐

sideration. The court reasoned that “[b]ecause the Supply

Agreement is not a requirements contract, and because even

the ‘Meet or Release’ provision in the Supply Agreement

does not require BRC to purchase carbon black exclusively

from Continental, there is no mutuality of obligation in the

Supply Agreement. [It] is therefore unenforceable for lack of

consideration.” 20 The court went on to adopt Continental’s

characterization of the Agreement as an unenforceable

“buyer’s option,” or “open offer to sell.” 21

We review the district court’s interpretation of the

Agreement de novo. BKCAP, LLC v. Captec Franchise Tr.

2000

‐ 1

, 572 F.3d 353, 358 (7th Cir. 2009); Kokomo Veterans, Inc.

v. Schick

, 439 N.E.2d 639, 643 (Ind. Ct. App. 1982) (noting

that the construction of an unambiguous contract is a ques

‐

tion of law). 22 For the reasons explained in the following

20 Id. at 15.

21 Id. at 16.

22 We previously treated the language of the Agreement as unambigu

‐

ous. See BRC Rubber & Plastics, Inc. v. Cont’l Carbon Co.

, 804 F.3d 1229,

1231 (7th Cir. 2015). The parties do not contest that characterization.12 No. 17

‐ 2783

paragraphs, we hold that the Agreement is supported by

mutuality and consideration and is, thus, enforceable.

Under Indiana law, a contract must impose mutual obli

‐ gations on the parties in order to be enforceable. Terre Haute

Reg’l Hosp., Inc. v. El

‐ Issa

, 470 N.E.2d 1371, 1377 (Ind. Ct.

App. 1984). “If both parties to the [Agreement] are not

bound, neither is bound,” id.

, and consideration is lacking.

Obligations that give rise to consideration can take the form

of legal benefits or legal detriments. Kelly v. Levandoski

, 825

N.E.2d 850, 860 (Ind. Ct. App. 2005) (“A benefit is a legal

right given to the promisor to which the promisor would not

otherwise be entitled. A detriment, on the other hand, is a

legal right the promisee has forborne.” (citation omitted)

(quoting DiMizio v. Romo

, 756 N.E.2d 1018, 1023 (Ind. Ct.

App. 2001))). Furthermore, the obligations on both parties

must be “reasonably definite and certain,” Zeyher v. S.S. & S.

Mfg. Co.

, 319 F.2d 606, 607 (7th Cir. 1963) (applying Indiana

law); they cannot be illusory promises that, by their terms,

make performance entirely optional, Pardieck v. Pardieck

, 676

N.E.2d 359, 364 n.3 (Ind. Ct. App. 1997). That said, so long as

a contract imposes definite obligations on both parties,

courts do not question whether the value of consideration is

adequate. Tanton v. Grochow

, 707 N.E.2d 1010, 1013 (Ind. Ct.

App. 1999).

Here, the Agreement imposes sufficiently definite obliga

‐

tions on both parties. Continental is obligated to make avail

‐

able “approximately 1.8 million pounds of prime [carbon]

black annually

... to be taken in approximately equal month

‐ ly quantities,” at the baseline prices set out “firm[ly]” in theNo. 17

‐ 2783 13

Agreement. 23 In return, BRC has accepted a legal detriment

under the “Meet or Release” provision, which is “naturally

read as a ‘right of first refusal,’ meaning if BRC sought to

buy carbon black from another seller at a lower price, Conti

‐

nental had to be given the chance to meet that price.” BRC

Rubber & Plastics, Inc.

, 804 F.3d at 1232. As we noted in the

previous appeal, BRC is not obligated to purchase any car

‐

bon black from Continental; BRC can purchase it at higher

prices from other suppliers or it can produce its own. How

‐

ever, BRC is prohibited from purchasing carbon black from

other suppliers on better terms than the Agreement unless

Continental reviews the offer and decides not to match it.

Under Indiana law, a right of first refusal to sell can sup

‐

port mutuality of obligation. Cf. Hyperbaric Oxygen Therapy

Sys., Inc. v. St. Joseph Med. Ctr. of Fort Wayne, Inc.

, 683 N.E.2d

243, 245 (Ind. Ct. App. 1997) (upholding contract where one

party provided the other with “the right to match the lowest

responsive bid or highest ranked proposal to sell”). 24 The

Indiana Court of Appeals has described a right of first re

‐

fusal as “a ‘valuable contractual right’ in which the

right

‐ holder may ‘preempt’ a third

‐ party offer for a protect

‐

ed interest.” B&R Oil Co. v. Stoler

, 77 N.E.3d 823, 828 (Ind. Ct.

23 R.6

‐ 1 at 1.

24 Although rights of first refusal most commonly appear in real proper

‐

ty transactions, the Indiana Court of Appeals has concluded that “the

subject matter [of such a right] may be anything which parties may make

the subject of contracts,” which includes “an owner [who] may by con

‐

tract with a prospective buyer obtain a [f]irst [r]ight to [s]ell.” Hyperbaric

Oxygen Therapy Sys., Inc. v. St. Joseph Med. Ctr.

, 683 N.E.2d 243, 249 (Ind.

Ct. App. 1997).14 No. 17

‐ 2783

App. 2017). Furthermore, the value of a right of first refusal

is not undermined by its conditional nature. See Saviano v.

Comm’r of Internal Revenue

, 765 F.2d 643, 653 (7th Cir. 1985)

(recognizing conditional right of first refusal). Therefore, the

right that Continental acquired through the “Meet or Re

‐

lease” provision is not legally diminished as a result of its

limited application to only those offers that are “better” than

the terms of the Agreement. It is not our place to question

the value of this consideration. See Tanton

, 707 N.E.2d at

1013.

On the other side of the bargain, Continental has prom

‐

ised to make available to BRC approximately 1.8 million

pounds of carbon black per year at the stated prices. Contra

‐

ry to Continental’s argument, mutuality of obligation does

not require that “the seller

... be required to sell and the

buyer

... be required to buy.” 25 It is clear under Indiana law

that “the doctrine of mutuality of obligation does not require

that every duty within an agreement be based upon a corre

‐ sponding obligation.” Terre Haute Reg’l Hosp.

, 470 N.E.2d at

1377. Therefore, BRC’s obligation under the Agreement need

not mirror that of Continental; it is not the case that the seller

be required to sell and the buyer be required to buy. See id.

(“Certainly a contract does not become unenforceable mere

‐ ly because the obligations of the parties differ in quality or

quantity.”). Because the Agreement imposes a definite obli

‐

25 Appellee’s Br. 24.No. 17

‐ 2783 15

gation on both parties, there is mutuality and considera

‐

tion. 26

Continental’s final argument is that the Agreement fails

because it lacks essential terms, specifically, precise quantity

terms for the total amount of carbon black and for each

grade of carbon black. Even if a contract is supported by

consideration, it “is unenforceable if it is so indefinite and

vague that the material provisions cannot be ascertained.”

Penn v. Ryan’s Family Steak Houses, Inc.

, 269 F.3d 753, 759 (7th

Cir. 2001) (quoting Pepsi

‐ Cola Gen. Bottlers v. Woods

, 440

N.E.2d 696, 699 (Ind. Ct. App. 1982)); see Wolvos v. Meyer

, 668

N.E.2d 671, 676 (Ind. 1996) (“[E]ssential terms need [to] be

included in order to render a contract enforceable.”). How

‐

ever, “[e]ven though one or more terms are left open[,] a

26 We therefore cannot accept the district court’s characterization of the

Agreement as a “buyer’s option,” or an “open offer to sell.” A “buyer’s

option” arises when a seller invites a buyer “to purchase as much or as

little product as it want[s] during” a specific period of time “at the prices

set forth on [a p]rice [l]ist.” Auto. Hardware Serv., Inc. v. Accubuilt, Inc.

,

No. 1:08

‐ CV

‐ 202, 2009 WL 3246676, at *6 (N.D. Ind. Oct. 6, 2009). The dis

‐

trict court relied on our decision in Brooklyn Bagel Boys, Inc. v. Earthgrains

Refrigerated Dough Prods., Inc.

, 212 F.3d 373, 378

– 79 (7th Cir. 2000), where

we considered an agreement to be a “buyer’s option” because it did not

obligate the buyer to purchase anything from the seller; it merely speci

‐

fied price points for the buyer’s potential purchases within a specified

period of time. The present contract is different. In Brooklyn Bagel Boys

, the buyer did not suffer any legal detriment as consideration for the sell

‐

er’s open offer. See id. Here, in contrast, BRC gave up a right to purchase

below the prices agreed upon with Continental without first affording

Continental the opportunity to examine any such offer and meet the

price. In exchange, it obtained the option to purchase 1.8 million pounds

of carbon black at the specified prices.16 No. 17

‐ 2783

contract for sale does not fail for indefiniteness if the parties

have intended to make a contract and there is a reasonably

certain basis for giving an appropriate remedy.” Ind. Code §

26

‐ 1

‐ 2

‐ 204(3); see also E.C. Styberg Eng’g Co. v. Eaton Corp.

, 492

F.3d 912, 917 (7th Cir. 2007) (noting that “the UCC takes a

liberal view towards what is required to create a contract for

the sale of goods”).

This agreement is sufficiently definite to be enforceable.

The Agreement expressly states that it “is the intent of this

Agreement that [Continental] agrees to sell to [BRC] approx

‐ imately 1.8 million pounds of prime [carbon] black annual

‐ ly.” 27 The parties’ intent to be bound is evidenced through

‐

out the Agreement, with references to “obligation[s]” and

terms that are “to remain firm.” 28 The approximation of the

annual quantity does not undermine the definiteness of the

contract. See Indiana Law Encyclopedia 279, § 24 cmt. (“The

required writing need not contain all the material terms of

the contract, and such material terms as are stated need not

be precisely stated

... .”); cf. S. Concrete Servs., Inc. v. Mableton

Contractors, Inc.

, 407 F. Supp. 581, 584, 584 n.2 (N.D. Ga.

1975) (finding the description of “approximately 70,000 cubic

yards” to be a valid “essential term” in a supply agreement),

aff’d

, 569 F.2d 1154 (5th Cir. 1978). Earlier in this litigation,

Continental explained aptly the commercial purpose of such

an approximation, which is “intended to allow for a reason

‐

able and defined degree of variation in the annual quantity

27 R.6

‐ 1 at 1.

28 Id.No. 17

‐ 2783 17

sold; otherwise, the occurrence of such variations might

cause either party to be in breach of the Agreement.” 29

Lastly, the lack of a specific quantity for each grade does

not undermine the definiteness of the Agreement. See Ind.

Code § 26

‐ 1

‐ 2

‐ 311(2) (“Unless otherwise agreed, specifica

‐

tions relating to assortment of goods are at the buyer’s op

‐

tion

... .”). 30 The lack of specificity with respect to the antici

‐ pated quantity of each grade of carbon black is quite com

‐ patible with the Agreement’s function as a supply contract

among entities operating at different tiers in the manufactur

‐ ing process. Although a manufacturer in this situation may

be able to estimate its overall manufacturing capacity or pro

‐ jected orders for a set period of time, its actual needs for par

‐

ticular grades of a commodity may vary as individual orders

29 R.32 (Continental’s Memorandum in Support of Summary Judgment)

at 11.

30 Continental points us to the Statute of Frauds, codified at section

26

‐ 1

‐ 2

‐ 201 of the Indiana Code, which specifies the terms that must ap

‐

pear in a contract for the sale of goods of $500 or more. The comments to

this section indicate that the “only term which must appear is the quanti

‐

ty term.” Ind. Code § 26

‐ 1

‐ 2

‐ 201 cmt. 1 (emphasis added). However,

Continental fails to read the entire commentary, which clarifies that the

quantity term “need not be accurately stated” although “recovery is lim

‐

ited to the amount stated.” Id. The text of the Statute of Frauds itself fur

‐

ther clarifies that a “writing is not insufficient because it omits

... a term

agreed upon, but the contract is not enforceable under this paragraph

beyond the quantity of goods shown in such writing.” Id. § 26

‐ 1

‐ 2

‐ 201(1).

Accordingly, the Statute of Frauds does not render a contract invalid due

to an imprecise quantity term. See U.C.C. § 2

‐ 201:180 (“The fact that a

quantity term is not precise is not fatal to the claim that a writing satisfies

the Statute of Frauds.”). It simply caps the quantity of goods for which

Continental can be held liable.18 No. 17

‐ 2783

are received. Building into its supply contract sufficient

nimbleness to meet these contingencies does not alter the es

‐

sential terms of the contract. Both parties recognize the need

to make such adjustments and accept the attendant risk as a

necessary component of the commercial relationship. Given

the function of the Agreement as a supply contract, we can

‐

not say on this record that such flexibility is anything other

than a realistic arrangement.

B.

The district court’s alternative ground for granting sum

‐

mary judgment focused on the sufficiency of BRC’s com

‐ plaint. As we have noted, the district court concluded that

our previous holding was fatal to BRC’s case because the

complaint does “not allege any alternative theory of the con

‐

tract under which [BRC] could recover any damages.” 31

Based on our review of the complaint and the controlling

principles governing contemporary federal pleading stand

‐

ards, we respectfully must part company with our colleague

in the district court. 32

The principles that govern our analysis were set forth

succinctly in Chessie Logistics Co. v. Krinos Holdings, Inc.

, 867

F.3d 852 (7th Cir. 2017):

31 R.173 at 10.

32 Although we apply the substantive law of Indiana, we apply federal

rules of procedure, including the federal standards of pleading. See Fid.

Nat’l Title Ins. Co. of N.Y. v. Intercounty Nat’l Title Ins. Co.

, 412 F.3d 745,

750 (7th Cir. 2005).No. 17

‐ 2783 19

When a new argument is made in summary

judgment briefing, the correct first step is to

consider whether it changes the complaint’s

factual theory, or just the legal theories [the]

plaintiff has pursued so far. In the former situ

‐

ation, the plaintiff may be attempting in effect

to amend its complaint, and the district court

has discretion to deny the de facto amendment

and to refuse to consider the new factual

claims. In the latter, the court should consider

the consequences of allowing the plaintiff’s

new theory. If it would, for example, “cause

unreasonable delay,” or make it “more costly

or difficult” to defend the suit, “the district

court can and should hold the plaintiff to his

original theory.”

Id. at 860 (italics in original) (citations omitted) (quoting Vi

‐

dimos, Inc. v. Laser Lab Ltd.

, 99 F.3d 217, 222 (7th Cir. 1996)).

We shall now examine these principles in some detail and

apply them to the case before us today.

The Supreme Court’s decisions in Bell Atlantic Corp. v.

Twombly

, 550 U.S. 544 (2007), Ashcroft v. Iqbal

, 556 U.S. 662

(2009), and their progeny enunciate the principles that must

guide our evaluation of the complaint before us. A com

‐ plaint must “state a claim to relief that is plausible on its

face.” McReynolds v. Merrill Lynch & Co.

, 694 F.3d 873, 885

(7th Cir. 2012) (quoting Twombly

, 550 U.S. at 570). A court

must be able “to draw the reasonable inference that the de

‐

fendant is liable for the misconduct alleged.” Id. (quoting Iq

‐

bal

, 556 U.S. at 678). Factual allegations “that are ‘merely

consistent with’ a defendant’s liability” do not pass the criti

‐20 No. 17

‐ 2783

cal “line between possibility and plausibility of ‘entitlement

to relief.’” Iqbal

, 556 U.S. at 678 (quoting Twombly

, 550 U.S. at

557). Of course, “plausibility, probability, and possibility

overlap,” In re Text Messaging Antitrust Litig.

, 630 F.3d 622,

629 (7th Cir. 2010), so courts still must exercise some degree

of judgment in evaluating the sufficiency of a complaint.

Although this standard is more rigorous than the one

employed in earlier times, it remains true that a plaintiff

need not plead legal theories. See Whitaker v. Milwaukee Cty.

,

772 F.3d 802, 808 (7th Cir. 2014). Furthermore, “when a

plaintiff does plead legal theories, it can later alter those the

‐

ories,” and “there is no burden on the plaintiff to justify al

‐ tering its original theory.” Chessie

, 867 F.3d at 859 (alteration

omitted) (quoting Vidimos

, 99 F.3d at 222).

However, as we already have noted, although a plaintiff

generally can alter the legal theories asserted in its com

‐ plaint, it cannot alter “the factual basis of [its] complaint at

summary judgment.” Whitaker

, 772 F.3d at 808. Such an al

‐

teration would be “an unacceptable attempt to amend the

pleadings through summary judgment argument.” Id. at 807;

see also Chessie

, 867 F.3d at 860. Two of our cases illustrate the

relevant distinction. In Whitaker

, we accepted the plaintiff’s

switch from her original theory of an “agency” relationship

(between the defendant and a third party) to her revised

theory of a “joint employer” relationship. Whitaker

, 772 F.3d

at 807. We explained that this change did not alter the “fun

‐

damental factual allegation” in the complaint; the plaintiff

merely had “offered an alternative legal characterization of

the factual relationship.” Id. at 808–09. By contrast, in Chessie

,

we rejected the plaintiff’s alteration of his original theory be

‐

cause it necessarily altered the fundamental factual allega

‐No. 17

‐ 2783 21

tions in his complaint. Chessie

, 867 F.3d at 860–61. There, the

plaintiff originally presented a case based on common law

negligence but, on summary judgment, switched it to a neg

‐ ligence per se case. We rejected this revision because pro

‐ ceeding as a negligence per se case required the fundamental

factual allegation that the plaintiff was injured by the de

‐

fendant’s removal of dirt from near the plaintiff’s property,

whereas the original theory had rested on the allegation that

his injury arose from the defendant’s dumping of dirt on the

plaintiff’s property. Id. at 861. The facts needed to support

his new legal theory were inconsistent with his original fac

‐

tual allegations.

As explained in Chessie

, if a complaint alters only the

plaintiff’s legal theory and not its factual allegations, the

court next must consider the consequences of allowing the

case to proceed under the new theory. See id. at 860. “If it

would, for example, ‘cause unreasonable delay,’ or make it

‘more costly or difficult’ to defend the suit, ‘the district court

can and should hold the plaintiff to his original theory.’” Id.

(quoting Vidimos

, 99 F.3d at 222).

Given these firm principles, our task is to determine

whether BRC’s revised interpretation of the Agreement al

‐

ters the factual basis of its complaint or only the legal theory

upon which BRC wishes to recover. We must therefore de

‐

termine whether BRC’s original factual allegations state a

plausible claim to relief under BRC’s new construction of the

Agreement. If we conclude that BRC’s new argument alters

only its legal theory, then we must examine the consequenc

‐

es of allowing BRC to proceed under this new theory, with

an eye toward unreasonable delay of the case and difficulties

posed to the defendant.22 No. 17

‐ 2783

Our assessment of the adequacy of BRC’s pleadings re

‐ quires that we have a firm understanding of the substantive

law on which BRC now bases its claim: the law of anticipa

‐

tory repudiation. Indiana courts recognize the general prin

‐ ciple that “[r]epudiation of a contract must be positive, abso

‐

lute, and unconditional.” Jay Cty. Rural Elec. Membership

Corp. v. Wabash Valley Power Ass’n

, 692 N.E.2d 905, 911 (Ind.

Ct. App. 1998). They also recognize that, in certain circum

‐

stances, repudiation can be effectuated by a party’s failure to

provide adequate assurance of future performance. See Hawa

v. Moore

, 947 N.E.2d 421, 426–27 (Ind. Ct. App. 2011). BRC

has alleged that Continental repudiated the Agreement by

failing to provide adequate assurances, so that framework

guides our analysis.

Indiana has adopted a version of the Uniform Commer

‐

cial Code’s (“UCC”) provision governing the “[r]ight to ade

‐

quate assurance of performance.” See Ind. Code § 26

‐ 1

‐ 2

‐

609. 33 This section generally “provides that a party feeling

insecure about the other party’s contract performance may

seek assurance of performance.” Wildwood Indus., Inc. v.

Genuine Mach. Design, Inc.

, 587 F. Supp. 2d 1035, 1047 (N.D.

Ind. 2008). It reads:

(1) A contract for sale imposes an obliga

‐

tion on each party that the other’s expectation

of receiving due performance will not be im

‐

33 The parties agree that Indiana law governs our substantive interpreta

‐

tion of the Agreement. Because the contract relates to the sale of goods,

Indiana’s version of the UCC applies. Ind. Code § 26

‐ 1

‐ 2

‐ 102. Further

‐

more, both of the parties qualify as “merchants” for purposes of the In

‐

diana Code. Id. § 26

‐ 1

‐ 2

‐ 104.No. 17

‐ 2783 23

paired. When reasonable grounds for insecuri

‐

ty arise with respect to the performance of ei

‐

ther party the other may in writing demand

adequate assurance of due performance and

until he receives such assurance may if com

‐ mercially reasonable suspend any performance

for which he has not already received the

agreed return.

(2) Between merchants the reasonableness

of grounds for insecurity and the adequacy of

any assurance offered shall be determined ac

‐ cording to commercial standards.

... .

(4) After receipt of a justified demand

failure to provide within a reasonable time not

exceeding thirty (30) days such assurance of

due performance as is adequate under the cir

‐

cumstances of the particular case is a repudia

‐

tion of the contract.

Ind. Code § 26

‐ 1

‐ 2

‐ 609.

The provision “rests on the recognition

... that a continu

‐ ing sense of reliance and security that the promised perfor

‐

mance will be forthcoming when due[] is an important fea

‐

ture of the bargain.” Id. cmt. 1. “If either the willingness or

the ability of a party to perform declines materially between

the time of contracting and the time for performance, the

other party is threatened with the loss of a substantial part of

what he has bargained for.” Id. Accordingly, “a buyer who

believes that the seller’s deliveries have become uncertain

cannot safely wait for the due date of performance when he24 No. 17

‐ 2783

has been buying to assure himself of materials for his current

manufacturing or to replenish his stock of merchandise.” Id.

“‘[R]easonable’ grounds and ‘adequate’ assurance [are]

defined by commercial rather than legal standards.” Id. cmt.

3. Therefore, what constitutes “reasonable” grounds and

“adequate” assurance are questions of fact that turn on the

“nature of the sales contract” and the circumstances of the

particular case. Id. cmts. 3, 4; see also AMF, Inc. v. McDonald’s

Corp.

, 536 F.2d 1167, 1170 (7th Cir. 1976) (“Whether in a spe

‐

cific case a buyer has reasonable grounds for insecurity is a

question of fact.”); Phibro Energy, Inc. v. Empresa De Polimeros

De Sines Sarl

, 720 F. Supp. 312, 322 (S.D.N.Y. 1989) (noting

that the “standard is high for a finding of insecurity as a

matter law,” given that the reasonableness of a party’s inse

‐ curity is a context

‐ specific question of fact). Notably, “a

ground for insecurity need not arise from or be directly re

‐

lated to the contract in question,” so a buyer “may have rea

‐

sonable grounds for insecurity if he discovers that his seller

is making defective deliveries

... to other buyers with similar

needs.” Ind. Code § 26

‐ 1

‐ 2

‐ 609 cmt. 3. That said, a buyer’s

insecurity “must be based upon reason and must not be arbi

‐

trary or capricious;” a buyer’s subjective dissatisfaction does

not negate a seller’s assurance if that assurance is commer

‐ cially adequate. Id. cmt. 4. “Indiana case law interpreting

and applying [section] 26

‐ 1[

‐ ]2

‐ 609 is sparse,” but the cases

make one thing clear: the reasonableness of a buyer’s insecu

‐ rity and the adequacy of a seller’s assurances are “very fact

‐ specific” and “very context

‐ specific” inquiries. Beijing Auto.

Indus. Imp. & Exp. Corp. v. Indian Indus., Inc.

, 105 F. Supp. 3d

879, 897, 900 (S.D. Ind. 2015).No. 17

‐ 2783 25

Measuring the allegations of the complaint against Indi

‐

ana’s law of anticipatory repudiation, we conclude that

BRC’s factual allegations plausibly allege that Continental

repudiated the Agreement by failing to provide adequate

assurances of performance. BRC has alleged plausibly that it

had “reasonable grounds for insecurity,” that it demanded

“adequate assurance of due performance,” and that Conti

‐

nental failed to provide assurance “as is adequate under the

circumstances of the particular case.” Ind. Code § 26

‐ 1

‐ 2

‐ 609.

The following allegations are particularly relevant to our

conclusion. The complaint alleges that Continental did not

fulfill BRC’s order placed in late April 2011, and that Conti

‐

nental was refusing to complete requested shipments to oth

‐

er buyers at the same time. Furthermore, Continental at

‐ tempted to increase the baseline prices despite the Agree

‐

ment’s specification that the prices were to “remain firm.” 34

When BRC requested an assurance of performance in writ

‐ ing, Continental responded equivocally, first telling BRC to

“call another supplier,” then stating that it would “continue

producing and shipping timely at the contract prices,” and

later tempering this assurance with the message that it

would “do the best [it] can re future orders.” 35 Following

these communications, Continental continued to seek price

increases as well as accelerated payment terms. 36

34 R.6

‐ 1 at 1.

35 R.6 at 5.

36 We are cognizant that the complaint describes the Agreement as a “re

‐ quirements contract.” However, a plaintiff “cannot plead [it]self out of

court by citing to the wrong legal theory” or the wrong legal authority.

Ryan v. Ill. Dep’t of Children & Family Servs.

, 185 F.3d 751, 764 (7th Cir.

(continued

... )26 No. 17

‐ 2783

We emphasize that we make no prediction about how

BRC might fare at trial. Based on these allegations, however,

BRC’s claim of repudiation does not fail as a matter of law.

The plausibility of BRC’s claim is not undermined by the cir

‐

cumstantial nature of the facts alleged in support of repudia

‐

tion. See Alaska Pac. Trading Co. v. Eagon Forest Prods., Inc.

,

933 P.2d 417, 422 (Wash. Ct. App. 1997) (“An intent to repu

‐

diate may be expressly asserted or circumstantially mani

‐

fested by conduct.” (quoting CKP, Inc. v. GRS Constr. Co.

, 821

P.2d 63, 74 (Wash. Ct. App. 1991))). Even if the Agreement

did not require Continental to provide more than 1.8 million

pounds of carbon black per year, the mosaic of alleged con

‐

duct plausibly supports a claim that BRC had reasonable

grounds for insecurity and that Continental failed to provide

adequate assurances. Furthermore, BRC’s revised theory of

the Agreement does not depend on any essential allegations

that are missing from its complaint. From the start, BRC has

maintained that Continental repudiated the Agreement by

failing to fulfill an order, seeking increased prices and accel

‐

erated payment terms, and providing equivocal assurances

of future performance. BRC has altered only its legal charac

‐

(

... continued)

1999); see Hatmaker v. Mem’l Med. Ctr.

, 619 F.3d 741, 743 (7th Cir. 2010)

(“Even citing the wrong statute needn’t be a fatal mistake[]

... .”). We

also note the allegation that Continental “made clear that it was no long

‐

er interpreting the Agreement as a requirements contract.” R.6 at 5. Alt

‐ hough this particular allegation no longer supports BRC’s claim of repu

‐

diation, it is neither necessary to nor inconsistent with BRC’s new theory.

Therefore, the change in BRC’s legal theory does not require a funda

‐

mental alteration in its factual allegations, as was the case in Chessie Lo

‐ gistics Co. v. Krinos Holdings, Inc.

, 867 F.3d 852, 861 (7th Cir. 2017).No. 17

‐ 2783 27

terization of the Agreement; its factual theory of the case has

remained constant. Whether its allegations add up to “posi

‐

tive, absolute, and unconditional” repudiation, Jay Cty.

, 692

N.E.2d at 911, is a question properly reserved for the trier of

fact.

Next, we must consider whether allowing BRC to ad

‐

vance its new legal theory unfairly harms the development

of the case or the defendant. We have recognized such

harms when the case is delayed unreasonably or becomes

“‘more costly or difficult’ to defend.” Chessie

, 867 F.3d at 859

(quoting Vidimos, 99 F.3d at 222). This record provides no

basis for our concluding that BRC’s new characterization of

the Agreement harms the development of the case or Conti

‐

nental’s defense. Notably, at earlier stages in this litigation,

Continental advanced the same construction of the contract

that BRC now endorses. 37 In these circumstances, Continen

‐

tal certainly is not prejudiced by BRC’s new argument,

which, in a strict sense, is not new to this case at all.

C.

We briefly consider Continental’s suggestion that we de

‐

cide as a matter of law whether Continental anticipatorily

repudiated the Agreement. We decline to do so for the sim

‐ ple reason that the relevant inquiries—whether BRC had

reasonable grounds for insecurity and whether Continental

provided adequate assurance—are highly fact

‐ specific and

37 See, e.g.

, R.32 at 10 (arguing in the alternative that the Agreement “is a

contract for the sale of a specific amount of goods—1.8 million pounds

per year”); R.39 at 4 (same).28 No. 17

‐ 2783

context

‐ specific. The parties’ divergent characterizations of

the facts in their briefs illustrate just how differently reason

‐

able factfinders might interpret the record. This record simp

‐ ly affords no basis for our deciding these questions as a mat

‐

ter of law.

Conclusion

In sum, we conclude that the Agreement is supported by

mutuality of obligation and, thus, consideration. The

Agreement is not an unenforceable “buyer’s option” and

does not fail for a lack of essential terms. We also conclude

that BRC’s complaint alleges adequately a claim of anticipa

‐

tory repudiation under its revised theory of the Agreement.

These revisions alter only BRC’s legal theory, not the fun

‐

damental factual basis for its claim. Nor do they prejudice

Continental or unreasonably delay the case. We, therefore,

hold that BRC’s repudiation claim does not fail as a matter of

law as a result of our prior holding. Given the highly fact

‐ specific nature of the remaining inquiries, we decline to de

‐

cide as a matter of law whether Continental repudiated the

Agreement. BRC may recover its costs of this appeal.

REVERSED and REMANDED