Reference no: EM131659113

Question: Material Breach. Kermit Johnson formed FB & I Building Products, Inc., in Watertown, South Dakota, to sell building materials. In December 1998, FB & I contracted with Superior Truss & Components in Minneota, Minnesota, "to exclusively sell Superior's open-faced wall panels, floor panels, roof trusses and other miscellaneous products." In March 2000, FB & I agreed to exclusively sell Component Manufacturing Co.'s building products in Colorado. Two months later, Superior learned of FB & I's deal with Component and terminated its contract with FB & I. That contract provided that on cancellation, "FB & I will be entitled to retain the customers that they continue to sell and service with Superior products." Superior refused to honor this provision. Between the cancellation of FB & I's contract and 2004, Superior made $2,327,528 in sales to FB & I customers without paying a commission. FB & I filed a suit in a South Dakota state court against Superior, alleging in part, breach of contract and seeking the unpaid commissions. Superior insisted that FB & I had materially breached their contract, excusing Superior from performing. In whose favor should the court rule and why?