Business concerns sometimes enter into sales agreements that do not specify a particular quantity to be sold.  This might be helpful, for instance, if a manufacturer would like to secure a commitment from a supplier to meet the manufacturer’s needs, but it is not certain what the needs will be.  These business relationships do not always work out over the long term, however, and litigation often results.  In these cases, courts have struggled to establish clear, consistent standards with respect to the validity and terms of open quantity contracts.  Many of these cases turn on the application of amorphous “good faith” standards, raising concerns about unpredictability and the possibility that the courts are effectively imposing requirements on the parties that they never actually contemplated. 

Bravely seeking to bring some coherence and clarity to this difficult area of the law, Shelley Smith has a helpful new article on SSRN entitled “A New Approach to the Identification and Enforcement of Open Quantity Contracts: Reforming the Law of Exclusivity and Good Faith.”  She describes her three-part reform agenda as follows: