Court Opinion

ID: 2994264
Source: CourtListenerOpinion
Date Created: 2015-09-24 19:13:42.196014+00
Date Added: 2024-06-11T12:45:28.725236
License: Public Domain

In the
United States Court of Appeals
For the Seventh Circuit

No. 99-3055

Brooklyn Bagel Boys, Inc.,

Plaintiff-Appellant,

v.

Earthgrains Refrigerated
Dough Products, Inc.,

Defendant-Appellee.

Appeal from the United States District Court
for the Northern District of Illinois, Eastern Division.
No. 98 C 4421--James F. Holderman, Judge.

Argued February 22, 2000--Decided May 8, 2000

 Before Coffey, Easterbrook, and Williams, Circuit
Judges.

 Williams, Circuit Judge. Plaintiff-Appellant
Brooklyn Bagel Boys, Inc. ("Brooklyn Bagel"),
brought this diversity action against Defendant-
Appellee Earthgrains Refrigerated Dough Products,
Inc. ("Earthgrains"), claiming that Earthgrains
wrongfully terminated a contract for the supply
of bagels. Thereafter, Earthgrains filed a motion
for summary judgment, which the district court
granted against Brooklyn Bagel. Prior to this
determination, the district court also granted
Earthgrains’ motion to strike the certification
of Gregory Stahl, the former president of
Brooklyn Bagel. This appeal followed the district
court’s entry of summary judgment in Earthgrains’
favor. For the reasons discussed below, we affirm
the judgment of the district court.

I

 Brooklyn Bagel produces bagels for third parties
who sell them under their own brand name.
Earthgrains manufactures, distributes, and sells
refrigerated dough products. In April, 1994,
Earthgrains began working on a project to develop
its own proprietary formula for bagels. After
nearly two years, Earthgrains developed a bagel
formula and began to contract with different "co-
packers" to manufacture bagels for distribution
under Earthgrains’ brand name. Earthgrains
entered into these "co-packing" relationships in
an effort to test the viability of its formula
without having to incur the substantial capital
expense of building its own bagel manufacturing
facility.

 In late 1994 or early 1995, Earthgrains
approached Brooklyn Bagel about being a co-packer
for the distribution of bagels out of
Earthgrains’ Fort Payne, Alabama facility.
Contract negotiations began, and the parties
eventually entered into a Contract Packaging
Agreement ("Contract") on March 25, 1996. Under
the Contract, Brooklyn Bagel agreed to process
and package bagels for Earthgrains in packaging
bearing Earthgrains’ brand name or other
trademarks owned or licensed by Earthgrains.
Brooklyn Bagel also agreed to purchase all of the
raw materials and packaging supplies necessary to
produce the bagels at its Franklin Park, Illinois
facility. Earthgrains, on the other hand, agreed
to provide Brooklyn Bagel with all the racks and
trays necessary for shipping the bagels. In
connection with this obligation, Earthgrains was
responsible for picking up the bagels for
distribution to its facilities.

 The Contract, among other terms, provided a
price structure for the bagels. The Contract does
not require Earthgrains to purchase a specific
quantity of bagels from Brooklyn Bagel. Instead,
the Contract stated that Brooklyn Bagel was to
process and package the "ordered quantity" of
bagels. The Contract required Earthgrains,
however, to provide a non-binding forecast every
three months, in a form as agreed by the parties,
for its expected bagel orders. The parties agreed
that the Contract would "continue in effect until
either party terminates it upon ninety (90) days
prior written notice to the other party of such
termination or terminates it as otherwise
provided in th[e] Agreement." (Contract para. 6.)
Their relationship continued under the Contract
until Earthgrains decided to begin manufacturing
its own bagels.

 In July, 1997, Earthgrains purchased the
business of one of its other co-packers. That
same month, Brooklyn Bagel’s Customer Service
Manager for the Earthgrains’ account, Vicki
Abrams, learned of Earthgrains’ plans to install
bagel manufacturing equipment in the Fort Payne
facility. Abrams then contacted Earthgrains’
Marketing Director, Phil Gruszka, concerning this
development, and Gruszka indicated that the
relationship between the parties would remain
unchanged for now. Later that year, Abrams again
contacted Gruszka, this time to ask whether
Brooklyn Bagel could budget Earthgrains’ business
in 1998. Approximately 80 percent of the bagels
sold by Brooklyn Bagel to Earthgrains during 1997
were shipped to and distributed out of the Fort
Payne facility. Gruszka informed Abrams that "he
didn’t know what [Earthgrains’] long-term plans
were, but [he] didn’t think 1998 was an issue."
At no point during his conversations with Abrams
did Gruszka make any promises to her about
Earthgrains’ plans for 1998 bagel production, and
Abrams had her doubts about whether Earthgrains
would continue ordering bagels from Brooklyn
Bagel in 1998.

 In late 1997, Earthgrains began installing
equipment to manufacture bagels at the Fort Payne
facility. Earthgrains completed the installation
by March of 1998. Around this time, Earthgrains
sent Brooklyn Bagel a letter expressing its
intent to terminate the Contract. Earthgrains
sent the letter in accordance with the Contract’s
ninety-day written notice of termination
provision. Gruszka also verbally advised Abrams
of the termination. Earthgrains then stopped
ordering bagels from Brooklyn Bagel for its Fort
Payne facility, but continued to order for its
Des Moines, Iowa facility. Once Abrams realized
that Earthgrains stopped ordering bagels for the
Fort Payne facility, she wrote Earthgrains’
President, William Opdyke, acknowledging receipt
of the termination letter. In late March, 1998,
Earthgrains sent Brooklyn Bagel a forecast for
its expected orders of bagels for distribution
out of the Des Moines facility over the remaining
months of the Contract, which was to terminate in
June, 1998.

 In July, 1998, Brooklyn Bagel sued Earthgrains,
asserting various state law claims for breach of
contract, breach of an implied duty of good faith
and fair dealing, promissory estoppel, and unjust
enrichment. One year later, the district court
granted Earthgrains summary judgment, finding
that the terms of the Contract were unambiguous
and did not obligate Earthgrains to purchase its
bagel needs for the Fort Payne facility from
Brooklyn Bagel. The district court ruled that
Earthgrains did not breach the parties’ Contract
and concluded that summary judgment was
appropriate with respect to Brooklyn Bagel’s
remaining claims. Prior to this determination,
the district court also granted Earthgrains’
motion to strike the certification of Gregory
Stahl, the former president of Brooklyn Bagel and
a signatory of the parties’ Contract, because the
certification was not based on Stahl’s personal
knowledge and did not affirmatively demonstrate
his competency to testify on matters contained
therein as required by Fed. R. Civ. P. 56(e).
Brooklyn Bagel now appeals the district court’s
summary judgment decision with respect to the
dismissal of the breach of contract and breach of
the implied duty of good faith and fair dealing
claims, as well as the district court’s ruling on
Earthgrains’ motion to strike.

II

 We review de novo the district court’s decision
to grant summary judgment to Earthgrains. See
Johnson v. Zema Sys. Corp., 170 F.3d 734, 742
(7th Cir. 1999). In order to overcome a motion
for summary judgment, Brooklyn Bagel must show
specific facts sufficient to raise a genuine
issue of material fact for trial. See Fed. R.
Civ. P. 56(c). In determining whether a genuine
issue of material fact exists, we construe the
record and all reasonable inferences drawn
therefrom in the light most favorable to Brooklyn
Bagel, the non-movant. See Senner v. Northcentral
Technical College, 113 F.3d 750, 754 (7th Cir.
1997). In reviewing the district court’s decision
to strike Stahl’s certification, however, we look
for an abuse of discretion. See Wollenburg v.
Comtech Mfg. Co., 201 F.3d 973, 977 (7th Cir.
2000).

A.   Breach of Contract

 1. Did the Parties Enter a Requirements
Contract?

 Brooklyn Bagel argues that the parties’ Contract
is an exclusive "requirements contract"
obligating Earthgrains to order all of its bagel
requirements for the Fort Payne facility from
Brooklyn Bagel. Brooklyn Bagel contends that the
Contract is ambiguous and that extrinsic evidence
demonstrates that the parties intended to enter
a requirements contract. In many American
jurisdictions, including Illinois (which the
parties agree governs this dispute), "a
requirements contract exists only when the
contract (1) obligates the buyer to buy goods,
(2) obligates the buyer to buy goods exclusively
from the seller, and (3) obligates the buyer to
buy all of its requirements for goods of a
particular kind from the seller." Zemco Mfg.,
Inc. v. Navistar Int’l Transp. Corp., 186 F.3d
815, 817 (7th Cir. 1999) (citing James J. White
& Robert S. Summers, Uniform Commercial Code sec.
3-9, at 154-55 (1995), and E. Allan Farnsworth,
Farnsworth on Contracts sec. 2-15, at 135-37
(1990)); see Wald v. Chicago Shippers Ass’n, 529
N.E.2d 1138, 1146 (Ill. App. Ct. 1988).

 While Brooklyn Bagel asserts that the Contract
is ambiguous and therefore capable of being
interpreted as a requirements contract, the
district court determined that, as a matter of
law, the Contract is not a requirements
contract./1 In examining whether the Contract is
ambiguous,/2 we first look to the plain language
of the Contract. See Atlantic Mut. Ins. Co. v.
Metron Eng’g & Constr. Co., 83 F.3d 897, 898 (7th
Cir. 1996); Metalex Corp. v. Uniden Corp. of Am.,
supra, 863 F.2d at 1333. Brooklyn Bagel argues
that the plain language of the Contract is
ambiguous as to whether it is a requirements
contract since the Contract lacks a quantity
term. However, we are bound to construe the
Contract as a whole, see Echo, Inc. v. Whitson
Co., Inc., 121 F.3d 1099, 1105 (7th Cir. 1997)
(interpreting Illinois law), and the lack of a
quantity term itself does not necessarily render
a contract ambiguous.

 In relevant part, Paragraph 2(a) of the
Contract states:

Subject to Paragraph 2(d) below, upon order by
[Earthgrains], [Brooklyn Bagel] will process and
pack the ordered quantity of the Product. The
Product will be packed in accordance with the
packaging instructions set forth in Exhibit B.
[Brooklyn Bagel] shall not produce Product in
advance of an order, and in no event shall it
produce more than 104% of any quantity of Product
ordered by [Earthgrains].

Paragraph 2(d), in turn, provides:

On or before each January 1, April 1, July 1 and
October 1 during the term hereof, [Earthgrains]
shall submit [Brooklyn Bagel] a written forecast
(in such form as may be agreed to by the parties)
of [Earthgrains’] anticipated requirements for
the next succeeding 3 months; provided that such
forecasts shall not be binding on either party.
[Earthgrains] shall use reasonable efforts to
notify [Brooklyn Bagel] at least 4 weeks in
advance if [Earthgrains] anticipates a material
increase in [Earthgrains’] demand for the
Product.

 After examining these provisions in context with
the Contract as a whole, we agree with the
district court that the Contract is not a
requirements contract as it does not expressly
obligate Earthgrains to purchase all, or any
specified quantity, of its requirements of bagels
for the Fort Payne facility from Brooklyn Bagel.
While such an obligation can be implicit, the
district court correctly characterized the
Contract as a "buyer’s option," similar to the
agreement at issue in In re Modern Dairy of
Champaign, Inc., 171 F.3d 1106 (7th Cir. 1999).
In Modern Dairy, two school districts argued that
a dairy contractor was obligated to supply their
milk requirements. In examining the existence of
a requirements contract, this court observed that
the parties’ contractual documents did not
explicitly, or by implication, require the school
districts to buy their milk requirements
exclusively from the dairy. Insofar as the dairy
merely agreed to sell milk to the school
districts at a specified price, within a
specified period of time, the court characterized
the parties’ agreement as a "buyer’s option"
rather than a requirements contract.

 Brooklyn Bagel, however, asserts that the
Contract is no different from the ambiguous
supply contract involved in Zemco Mfg., Inc. v.
Navistar Int’l Transp. Corp., supra. The facts
here are far different than those in Zemco. In
Zemco, this court found the supply contract,
which also did not include a quantity term, to be
susceptible to more than one interpretation. By
contrast, in this case, there is but one
reasonable interpretation of the contractual
language. Paragraph 2 of the Contract clearly
gave Earthgrains the discretion to order its
bagel needs from Brooklyn Bagel. The contractual
language here cannot be alternatively read as an
"articulation of the manner in which [the buyer]
should place its orders as it has need for the
[specified goods]," like the contractual language
in Zemco. 186 F.3d at 817. Furthermore, the
contract in Zemco, unlike here, contained a
priority clause in the event the supplier was
unable to meet the production need of the buyer
manufacturer. Zemco also involved exclusive
dealings between the parties over a period of
twelve years, a circumstance not present in this
case. Therefore, a variety of textual and non-
textual considerations precluded the Zemco court
from ruling out the existence of a requirements
contract.

 Under the Contract, Earthgrains clearly had no
obligation to buy all, let alone any quantity, of
its bagel requirements from Brooklyn Bagel.
Paragraph 2 makes this clear, and the Contract
specified a fee to be paid for the "ordered"
bagels, which could only increase or decrease at
six-month intervals. Under the Illinois
Commercial Code, such an agreement is enforceable
even though Earthgrains made no reciprocal
commitment to buy all its bagel needs from
Brooklyn Bagel. See 810 Ill. Comp. Stat. sec.
5/2-205;/3 Modern Dairy, 171 F.3d at 1110
(noting "[a] seller’s firm offer to supply the
buyer’s needs for some good at a specified price
and other terms is enforceable . . . even though
the buyer makes no reciprocal commitment to buy
all its needs from this seller"). Therefore, the
district court’s characterization of the Contract
as a buyer’s option was appropriate./4

In an effort to demonstrate that the parties
had a requirements contract, Brooklyn Bagel also
points to sec. 2-306(1) of the Uniform Commercial
Code,/5 which functions as a primary gap-filler
for open quantity terms in requirements
contracts. Under Illinois law, however, an
essential element of a requirements contract is
the promise by the buyer to purchase all of its
requirements, or at least a minimum quantity,
from the seller. See Torres v. City of Chicago,
supra, 632 N.E.2d at 58. No promise of that
nature can be found in the Contract. Moreover,
Brooklyn Bagel cannot genuinely dispute this lack
of exclusivity in the Contract./6 In the absence
of exclusivity, there can be no valid
requirements contract. See id.; see also White &
Summers, supra, sec. 3-9, at 155-56 (noting
"[b]ecause section 2-306 depends on exclusivity
to determine the quantity, there can be no valid
requirements contract without it").

 While Brooklyn Bagel argues that Paragraph 2(d)
contemplates the use of estimates or forecasts--a
common feature of a requirements contract--the
Contract provides that "such forecasts shall not
be binding on either party," and Brooklyn Bagel
acknowledges that the parties rarely used this
feature. With respect to Brooklyn Bagel’s
contention that the parties intended for Brooklyn
Bagel to be the sole supplier of bagels at the
Fort Payne facility, this promise is nowhere to
be found in the Contract. In fact, the Contract
does not reference any geographic region or
distribution facility. The parties surely could
have included this term in the Contract had they
desired. In any event, Brooklyn Bagel cannot
point to any contractual language indicating that
it would be a breach of contract for Earthgrains
to either (1) stop ordering from Brooklyn Bagel,
(2) use another manufacturer, or (3) manufacture
its own bagels.

 Accordingly, the Contract, taken as a whole,
overwhelmingly establishes that the parties did
not enter a requirements contract. Instead, the
Contract provided an agreement by Brooklyn Bagel
to manufacture bagels for Earthgrains at a
specified price, within an agreed period, subject
to Earthgrains’ bagel needs.

 Brooklyn Bagel nevertheless argues that
extrinsic evidence demonstrates that Earthgrains
was obligated to buy all of its bagel
requirements for the Fort Payne facility from
Brooklyn Bagel. The district court found Brooklyn
Bagel’s extrinsic evidence inadmissible or,
alternatively, unsupportive of its position. As
an initial matter, the Contract contains an
integration clause stating that the Contract
between the parties "constitutes the entire
agreement of the parties," and "supersedes all
prior and contemporaneous agreements." (Contract
para. 25.) Given such a clause, the parol
evidence rule generally forbids the use in
evidence of a prior or contemporaneous agreement
or terms not included in the Contract. See
Sunstream Jet Exp., Inc. v. International Air
Serv. Co., Ltd., 734 F.2d 1258, 1265 (7th Cir.
1984) (noting under Illinois law "if the contract
imports on its face to be a complete expression
of the whole agreement, it is presumed that the
parties introduced into it every material item,
and parol evidence cannot be admitted to add
another term to the agreement").

 Notwithstanding the parol evidence rule,
extrinsic evidence can be admitted to discover
the parties’ genuine intent when a contract is
ambiguous, see FDIC v. W.R. Grace & Co., supra,
877 F.2d at 620-21; Modern Dairy, 171 F.3d at
1109, but "there must be either contractual
language on which to hang the label of ambiguous
or some yawning void . . . that cries out for an
implied term." Bidlack v. Wheelabrator Corp., 993
F.2d 603, 608 (7th Cir. 1993) (en banc) (lead
opinion). Extrinsic evidence cannot be used "to
create a conflict completely apart from the
contract itself." R.T. Hepworth Co. v. Dependable
Ins. Co., Inc., 997 F.2d 315, 318 (7th Cir.
1993). Brooklyn Bagel neither points to any
contractual language that is reasonably
susceptible to differing interpretations, nor
suggests a void that "cries out for" an implied
term in the Contract.

 As a further constraint on the consideration of
this evidence, the Illinois Commercial Code only
allows extrinsic evidence including course of
performance, course of dealing, and usage of
trade to be considered when it is reasonably
consistent with the express terms of the
contract. See 810 Ill. Comp. Stat. sec.sec. 5/2-
208(2), 5/2-202. Brooklyn Bagel does not seek to
introduce evidence that is consistent with the
terms of the Contract,/7 and it otherwise fails
to establish any ambiguity in the terms of the
Contract. We conclude, as a matter of law, that
the parties did not enter a requirements
contract.

 2. Did Earthgrains Breach the Termination
Provision?

 In a separate argument, which bears more
directly on its breach of contract claim,
Brooklyn Bagel asserts that even if the parties
did not enter a requirements contract, the
Contract is ambiguous with respect to
Earthgrains’ performance obligation under the
termination notice provision. Brooklyn Bagel
claims that the Contract obligated Earthgrains to
continue ordering its bagel requirements from
Brooklyn Bagel during the ninety-day termination
notice period. According to Brooklyn Bagel,
Earthgrains therefore breached the termination
notice provision when it stopped ordering bagels
for the Fort Payne facility from Brooklyn Bagel
and began manufacturing its own bagels during the
ninety-day notice period.

 The Contract, however, only required Earthgrains
to provide Brooklyn Bagel with ninety-day written
notice of termination. (Contract para.6.) There
is no language contained within the termination
notice provision itself, or the Contract as a
whole, that obligated Earthgrains to order bagels
from Brooklyn Bagel even during the ninety-day
notice period, and Brooklyn Bagel has failed to
show that the parties intended such a performance
obligation in the face of the unambiguous terms
of the Contract. Since Brooklyn Bagel does not
dispute the adequacy or form of the notice
provided, it has not established any breach of
the Contract by Earthgrains and Earthgrains was
entitled to summary judgment on the contract
claim because there are no genuine issues of
material fact for trial.

B.   Implied Duty of Good Faith and Fair Dealing

 Brooklyn Bagel further contends that Earthgrains
breached its implied duty of good faith and fair
dealing by not ordering bagels during the ninety-
day termination notice period. Under Illinois
law, "the covenant of good faith and fair dealing
is not an independent source of duties for the
parties to a contract." Baxter Healthcare Corp.
v. O.R. Concepts, Inc., 69 F.3d 785, 792 (7th
Cir. 1995) (interpreting Illinois law). While
"[t]he UCC [810 Ill. Comp. Stat. sec. 5/1-203]
imposes an obligation of good faith in the
performance of all contracts under its domain,"
this duty merely "guides the construction of
contracts and does not create independent duties
of the contracting parties." Echo, Inc., 121 F.3d
at 1106. Therefore, Brooklyn Bagel cannot bring
a separate cause of action on this basis. Id.

 While acknowledging that the implied covenant is
"a tool of construction," Brooklyn Bagel insists
that Earthgrains acted in bad faith by not
ordering bagels during the ninety-day notice
period. In Kham & Nate’s Shoes No. 2, Inc. v.
First Bank of Whiting, 908 F.2d 1351, 1357 (7th
Cir. 1990), the court stated:

"Good faith" is a compact reference to an implied
undertaking not to take opportunistic advantage
in a way that could not have been contemplated at
the time of drafting, and which therefore was not
resolved explicitly by the parties. When the
contract is silent, principles of good faith--
such as the UCC’s standard of honesty in fact,
UCC sec. 1-201(19), and the reasonable
expectations of the trade, UCC sec. 2-103 . . .
fill the gap.

 There is nothing in the Contract that prohibits
Earthgrains from manufacturing its own bagels,
nor has Brooklyn Bagel shown that this reasonably
"could not have been contemplated" by the
parties. Accordingly, the district court properly
dismissed Brooklyn Bagel’s claim for breach of
the implied duty of good faith and fair dealing.

C. Motion to Strike the Certification of Gregory
Stahl

 Brooklyn Bagel finally contends that the
district court erred by striking the
certification of Gregory Stahl, the former
president of Brooklyn Bagel and a signatory to
the Contract. Brooklyn Bagel initially asserts
that its breach of contract claim can be
established without any consideration of Stahl’s
certification. According to Brooklyn Bagel,
Stahl’s certification merely offers additional
extrinsic evidence that the parties intended to
enter into a requirements contract. While
consideration of this evidence is unnecessary in
light of the unambiguous Contract, we nonetheless
review the district court’s ruling for an abuse
of discretion.

 Stahl’s certification purports to express his
own recollection before and at the time of the
execution of the Contract. The district court
excluded Stahl’s certification because the
certification was not based on his personal
knowledge and did not establish his competency to
testify to the matters contained in the
certification. The district court based its
ruling on Fed. R. Civ. P. 56(e). Under Rule
56(e), an affidavit "shall be made on personal
knowledge, shall set forth facts as would be
admissible in evidence, and shall show
affirmatively that the affiant is competent to
testify to the matters stated therein."

 An examination of the record indicates that the
district court did not abuse its discretion in
striking Stahl’s certification. As the district
court observed, Stahl gave deposition testimony
that he was "really on the sidelines of [contract
negotiations]" and "was being updated as th[e]
[contract negotiations] went along." Brooklyn
Bagel further admits that Stahl was not involved
in the "day-to-day" contractual negotiations.
(Appellant’s Br. at 35.) Stahl, however,
specifically testifies in the certification about
the understanding the parties had in executing
the Contract. Given his conflicting deposition
testimony, Stahl’s understanding of the Contract,
which he did not form independent of others, is
of no evidentiary value. Therefore, the district
court did not err in finding that Stahl lacked
personal knowledge about the information
contained in the certification.

 The district court was also correct in its
observation that Stahl’s certification presented
many self-serving, conclusory allegations, which
were based on his private expectations of the
Contract. Stahl’s private expectations are of no
consequence, particularly since he offered no
factual basis to demonstrate Earthgrains’
awareness of his expectation or understanding.
See Sethness-Greenleaf, Inc. v. Green River
Corp., 65 F.3d 64, 66-67 (7th Cir. 1995). The
district court’s grant of Earthgrains’ motion to
strike Stahl’s certification did not constitute
an abuse of discretion.

III

 For the reasons stated above, we AFFIRM the
judgment of the district court.

/1 This court has recognized that "[i]f a contract
is unambiguous, by definition no material issues
of fact exist regarding the contract’s
interpretation; that interpretation is a question
of law for the court." Metalex Corp. v. Uniden
Corp. of Am., 863 F.2d 1331, 1333 (7th Cir.
1988). But if the contract is ambiguous, the
contract’s meaning is a question for the trier of
fact. Id.

/2 According to Illinois law, a contract is
ambiguous only if it is "reasonably and fairly
susceptible to more than one construction."
Omnitrus Merging Corp. v. Illinois Tool Works,
Inc., 628 N.E.2d 1165, 1168 (Ill. App. Ct. 1993)
(internal quotation marks and citation omitted).
"The fact that parties to a contract disagree
about its meaning does not [necessarily] show
that it is ambiguous." FDIC v. W.R. Grace & Co.,
877 F.2d 614, 621 (7th Cir. 1989).

/3 This section in relevant part states:

An offer by a merchant to buy or sell goods in a
signed writing which by its terms gives assurance
that it will be held open is not revocable, for
lack of consideration, during the time stated or
if no time is stated for a reasonable time, but
in no event may such period of irrevocability
exceed 3 months . . . .

/4 We note that the district court alternately
viewed the parties’ relationship as a series of
separate contracts, with the added element that
several of the contract terms would relate back
to the original Contract, presumably on the
theory that each time Earthgrains placed an order
for bagels, a contract between the parties was
created. This characterization is consistent with
a buyer’s option since the original Contract
(although denominated as such by the parties) is
akin to an offer by Brooklyn Bagel to manufacture
bagels for Earthgrains at a specified price,
within an agreed period. See White & Summers,
supra, sec. 3-9, at 157; see also Streich v.
General Motors Corp., 126 N.E.2d 389, 393-95
(Ill. App. Ct. 1955). Earthgrains manifested its
assent to the offer, which Brooklyn Bagel never
revoked, by placing orders for the bagels, thus
triggering the obligations contemplated by the
original Contract (i.e., offer). See Torres v.
City of Chicago, 632 N.E.2d 54, 58 (Ill. App. Ct.
1994).

/5 This section states as follows:

A term which measures the quantity by the output
of the seller or the requirements of the buyer
means such actual output or requirements as may
occur in good faith, except that no quantity
unreasonably disproportionate to any stated
estimate or in the absence of a stated estimate
to any normal or otherwise comparable prior
output or requirements may be tendered or
demanded.

UCC sec. 2-306(1); 810 Ill. Comp. Stat. sec. 5/2-
306(1).

/6 Paragraph 2(a), for example, clearly enjoined
Brooklyn Bagel from producing bagels unless
Earthgrains placed an order for them, and even
then Brooklyn Bagel could produce no more than
"104% of any quantity" of bagels ordered by
Earthgrains.

/7 Brooklyn Bagel’s extrinsic evidence, including
its supposed course of dealing, course of
performance, and trade usage evidence, attempts
to show that the parties intended for Brooklyn
Bagel to be the sole supplier of bagels at the
Fort Payne facility and that Earthgrains agreed
to buy all of its bagel requirements for that
location from Brooklyn Bagel. However, we agree
with the district court that Brooklyn Bagel’s
extrinsic evidence, taken as a whole, is
inconsistent with the unambiguous terms of the
Contract. The evidence presents little, or no,
objective proof of (1) prior exclusive dealings
between the parties, (2) an industry custom over
the usage of a single co-packer for a specific
geographic region, and (3) a course of
performance indicating a requirements contract.
See Murphy v. Keystone Steel & Wire Co., 61 F.3d
560, 564 (7th Cir. 1995) (noting "[t]he party
claiming that a contract is ambiguous must first
convince the [court] that this is the case . . .
and must produce objective facts, not subjective
and self-serving testimony, to show that a
contract which looks clear on its face is
actually ambiguous") (internal citation omitted
and emphasis added); accord Ashan v. Eagle, Inc.,
678 N.E.2d 1238, 1241 (Ill. App. Ct. 1997)
(citing Home Ins. Co. v. Chicago & Northwestern
Transp. Co., 56 F.3d 763, 768 (7th Cir. 1995)).
Furthermore, the evidence is critically undercut
by the fact that Brooklyn Bagel supplied bagels
for distribution out of Earthgrains’ Des Moines,
Iowa facility. Since the Contract does not
contain any geographic restrictions on the
distribution of bagels sold by Brooklyn Bagel,
this strongly suggests that Earthgrains had
complete flexibility in the manner in which it
distributed bagels sold by Brooklyn Bagel.