Kamax, Cadillac Rubber, and the Continued Validity of Flexible Quantity Terms After Airboss: Michigan Supreme Court Grants Leave to Appeal the Kamax Decision

In June 2025, Honigman reported on the Court of Appeals’ published decision in FCA US LLC v. Kamax Inc..  The Kamax decision distinguished the Michigan Supreme Court’s ruling in MSSC, Inc. v. Airboss Flexible Products Co. and reaffirmed the decision in Cadillac Rubber & Plastics, Inc. v. Tubular Metal Systems, LLC , concluding that requirements contracts with quantity terms expressed as a percentage-range can be enforceable and satisfy the Uniform Commercial Code’s (“UCC”) statute of frauds.  The Court of Appeals’ decision in Kamax seemed to offer clarity regarding the enforceability of flexible quantity terms in long-term supply agreements in the post-Airboss landscape. 

But the Michigan Supreme Court has now granted Kamax, Inc.’s application for leave to appeal the Court of Appeals decision to consider two issues: first, whether Cadillac Rubber remains good law following Airboss, and second, whether a written contract that uses a percentage range of a buyer’s requirements (e.g. 65-100%) satisfies the UCC’s statute of frauds. 

Kamax Background: Long-standing Supply Relationship Under Scrutiny

FCA and Kamax had a long-standing supplier relationship governed by global terms and individual purchase orders, which committed FCA to purchase “approximately 65%–100% of [its] requirements” for each part, effective “through the life of the program.”  When Kamax sought to impose unilateral price increases and threatened to cease deliveries, FCA sued for breach of contract and secured a preliminary injunction to maintain supply continuity. Kamax moved to dissolve the injunction, arguing that the percentage-based language lacked the definiteness required under Airboss and was unenforceable under MCL 440.2201(1).

Court of Appeals: Flexible Quantity Terms Enforceable

The Court of Appeals rejected Kamax’s argument and upheld the injunction, holding that a buyer’s promise to purchase a specified percentage range of its needs constitutes a sufficiently definite quantity under MCL 440.2201(1).  In doing so, the Court of Appeals cited its decision in Cadillac Rubber, which held that a quantity stated in a range “between one part and 100% of [the buyer’s] requirements” satisfied the statute of frauds and constituted a valid requirements contract.  It distinguished the Michigan Supreme Court’s decision in Airboss, noting that the contract at issue in Airboss did not contain any quantity requirement, whereas the contracts in Cadillac Rubber and Kamax included a quantity term expressed as a percentage range.  In other words, Kamax reconciled Cadillac Rubber and Airboss by finding an enforceable quantity term which satisfies the statute of frauds so long as the contract contains any quantity term, even if imprecisely stated or stated as a range of total requirements.

Potential Implications on Flexible Quantity Term Requirements Contracts

While Kamax confirmed that Michigan courts would enforce percentage-based requirements contracts when the quantity term is reasonably certain and supported by the parties’ conduct, the Michigan Supreme Court’s grant order calls the enforceability of such contracts into question.  If the Michigan Supreme Court disagrees with the Court of Appeals’ rationale in Kamax—and finds that a percentage range of requirements is an insufficiently definite quantity term—it could overrule the Cadillac Rubber decision and expand the scope of Airboss.

In any event, the Michigan Supreme Court’s decision to hear Kamax’s appeal indicates that the quantity term for requirements contracts remains subject to evolving legal scrutiny.  Automotive suppliers and OEMs should regularly assess their contracts to ensure that supply terms align with legal standards and operational realities considering this evolving landscape.

Key Takeaways for Suppliers and OEMs

• The Validity of Defined Ranges is Subject to Dispute: The Court of Appeals in Kamax said that requirements contracts with a quantity term such as “approximately 65%–100%” can satisfy the UCC’s quantity requirement when paired with consistent performance.  The Michigan Supreme Court will review that decision in light of Airboss, which may render flexible quantity terms unenforceable.
• Airboss May Impact More than Blanket Release Contracts: The Court of Appeals distinguished Airboss and relied on Cadillac Rubber in finding a percentage range to be a sufficient quantity term.  But the Michigan Supreme Court has indicated that Airboss may bear on the validity of requirements contracts with imprecise quantity terms and calls into question the continuing validity of Cadillac Rubber.
• Audit Supply Agreements: The Michigan Supreme Court’s grant in Kamax is a reminder that supply agreements should be regularly reviewed to ensure that quantity terms are precise, supported by course-of-dealing, and drafted to withstand scrutiny under Airboss and any opinion the Michigan Supreme Court issues in Kamax.

If you have questions about the implications of the Michigan Supreme Court’s decision granting leave to appeal FCA US LLC v. Kamax Inc., please contact a member of Honigman’s Automotive and Manufacturing or Commercial Transactions practice groups, which advise OEMs, Tier 1 and Tier 2 suppliers, and aftermarket companies on supply chain contracts, litigation, and risk mitigation.