Kamax Settlement Means Michigan Supreme Court Unlikely to Resolve Questions about Validity of Flexible Quantity Terms after Airboss

In November 2025, Honigman reported on the Michigan’s Supreme Court’s decision to grant leave to appeal the Court of Appeal’s published opinion in FCA US LLC v. Kamax Inc. The Kamax decision from the Court of Appeals 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 (e.g., 65-100% of a buyer’s requirements) can be enforceable and satisfy the Uniform Commercial Code’s (“UCC”) statute of frauds.  Kamax has been closely watched for its implications on supply chain relationships, existing requirements contracts, and the automotive and manufacturing industries.

Kamax Presented Opportunity to Resolve Issues about post-Airboss Validity of Flexible Quantity Terms

Kamax offered an opportunity for the Michigan Supreme Court to clarify two highly contested issues: (1) whether Cadillac Rubber remains good law following Airboss, and (2) whether a written contract that uses a percentage range of a buyer’s requirements satisfies the UCC’s statute of frauds.  Those open questions have led to uncertainty about the status of existing supply chain arrangements and how lower courts enforce those arrangements. 

Last-Minute Settlement Could Defer Additional Guidance from Michigan Supreme Court

On April 6, the Michigan Supreme Court entered an order adjourning the upcoming oral argument in response to a stipulation to dismiss filed by the parties after an apparent last-minute settlement. Although the Court has not yet dismissed the case—and could still hear it despite the parties’ settlement—the recent order and adjournment of oral argument suggest that the Court may forgo the opportunity to resolve the underlying issues raised by Kamax.

If the Court dismisses the Kamax appeal, then Kamax and Cadillac Rubber will remain good law for the time being.  That leaves open the possibility that Michigan courts will enforce percentage-based requirements contracts when the quantity term is reasonably certain and supported by the parties’ conduct. But questions about the status of certain types of supply contracts will remain unanswered and subject to continued scrutiny and uncertainty in the trial courts when disputes arise.

If you have questions about the implications of Kamax, Cadillac Rubber, or Airboss, 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.