Disputed Oral “Sole Supplier” Deal and Compensation Terms Create Jury Issues, Precluding Summary Judgment (Fourth Circuit)

1. Introduction

East Coast Storage Equipment Co Inc v. ZF Transmissions Gray Court LLC is an unpublished Fourth Circuit decision arising from a construction-project procurement dispute at ZF’s Gray Court, South Carolina facility. East Coast, a racking-system designer/manufacturer/installer, alleged that ZF induced it to provide detailed racking drawings for inclusion in a request for quotation (RFQ) by promising East Coast exclusive supplier rights and the revenue associated with that role. After the general contractor (THS Constructors, Inc.) was selected, East Coast was subcontracted but then terminated and never paid for drawings or work performed.

The central issue on appeal was whether summary judgment was proper where the record contained conflicting testimony about (i) whether an oral contract existed between East Coast and ZF, and (ii) whether any such contract included compensation (directly or via the anticipated subcontract revenue) for the drawings East Coast provided. Closely tied were the viability of East Coast’s equitable theories (promissory estoppel, unjust enrichment, quantum meruit), which turn on whether a pertinent contract exists and what it covers.

2. Summary of the Opinion

The Fourth Circuit vacated and remanded. Applying de novo review, the majority held that genuine disputes of material fact exist regarding (1) whether the parties formed a contract at all and (2) the contract’s material terms—particularly whether ZF promised that East Coast would receive monetary compensation (whether characterized as “revenue” from exclusive supplier status or otherwise) in exchange for producing RFQ-ready drawings. Because these threshold factual disputes affect both the breach claim and the equitable claims, summary judgment was improper on all appealed claims.

Judge Niemeyer dissented, concluding the record showed the bargain was limited to ZF designating East Coast as the sole supplier in the RFQ, and that ZF fully performed that obligation. In the dissent’s view, East Coast’s own testimony did not support an additional promise of payment for drawings.

3. Analysis

3.1 Precedents Cited

Summary judgment standard and appellate posture

Iraq Middle Mkt. Dev. Found. v. Harmoosh, 947 F.3d 234, 237 (4th Cir. 2020): The majority anchored its standard of review—de novo—emphasizing that summary judgment is appropriate only when, viewing the evidence in the nonmovant’s favor, there is no genuine dispute of material fact and the movant is entitled to judgment as a matter of law. This framing was decisive because the case turned on competing deposition testimony about what was promised in a “closed door” discussion.

South Carolina contract formation principles

Armstrong v. Collins, 621 S.E.2d 368, 376 (S.C. Ct. App. 2005) (quoting Roberts v. Gaskins, 486 S.E.2d 771, 773 (S.C. Ct. App. 1997)): Cited for the definition of contract as an obligation arising from actual agreement manifested by words (oral/written) or conduct—supporting the proposition that an oral agreement could exist even without formal writings.
Branche Builders, Inc. v. Coggins, 686 S.E.2d 200, 202 (S.C. Ct. App. 2009) (citing Fuller v. E. Fire & Cas. Ins. Co., 124 S.E.2d 602, 610 (S.C. 1962)): Used to restate the elements of breach of contract—existence, breach, and damages—and to explain why the majority could not reach breach or damages without first resolving formation and terms.
Stevens and Wilkinson of S.C., Inc. v. City of Columbia, 762 S.E.2d 696, 701 (S.C. 2014): Cited for the rule that contract existence is ordinarily a jury question. This case supported the majority’s conclusion that the district court prematurely resolved factual disputes that should go to a jury.
Player v. Chandler, 382 S.E.2d 891, 893 (S.C. 1989) (citing Hughes v. Edwards, 220 S.E.2d 231 (1975)): The “meeting of the minds” requirement—mutual assent as to essential and material terms—provided the doctrinal lens for analyzing whether the parties agreed to compensation for drawings or only to RFQ inclusion/preferred supplier status.
Corbin on Contracts § 4.1 (Matthew Bender 2025): Quoted for the caution that courts cannot enforce a contract unless they can determine what it is; parties’ belief that they “made a contract” is insufficient. The majority used this to underscore that the contract’s terms were genuinely disputed and therefore not suitable for summary resolution.

Oral negotiations and fact-intensive mutual assent determinations

Charbonnages de France v. Smith, 597 F.2d 406, 415 (4th Cir. 1979): A central authority for the proposition that in protracted negotiations—a “jumble of letters, telegrams, acts, and spoken words”—mutual assent is ordinarily a fact question, rarely so unequivocal as to be resolved on summary judgment. The majority applied this directly: the record contained meeting minutes, RFQ documentation, and competing testimony about a private conversation.
R.B. Ventures, Ltd. v. Shane, 112 F.3d 54, 60: Cited for the proposition that a plaintiff’s oral testimony can be sufficient to create a genuine issue of material fact requiring trial. This supported the majority’s reliance on Geddes’s testimony about Zepf’s alleged “guarantee” and revenue promise.
Nowlin v. Resolution Tr. Corp., 33 F.3d 498, 508 (5th Cir. 1994): Cited to emphasize the fact-specific nature of determining the number of contracts and intended terms, reinforcing that the dispute could not be resolved as a matter of law on the present record.

Interplay between contract uncertainty and equitable claims

Volvo Constr. Equip. N. Am., Inc. v. CLM Equip. Co., 386 F.3d 581, 599 (4th Cir. 2004): Cited for the limitation that promissory estoppel cannot proceed when it conflicts with the terms of a contract—making the existence and scope of a contract a threshold question.
Gibson v. Epting, 827 S.E.2d 178, 183 (S.C. Ct. App. 2019): Cited for the principle that unjust enrichment and quantum meruit generally cannot proceed if a pertinent contract exists—again making contract formation and coverage dispositive “gatekeeper” issues.

3.2 Legal Reasoning

The district court granted summary judgment on the theory that East Coast “received the full benefit of its bargain” because it was, in fact, hired as the racking subcontractor. The Fourth Circuit rejected that reasoning as prematurely resolving disputed facts about the bargain’s scope.

The majority’s logic proceeded in two steps:

Formation dispute: The court held there was a genuine dispute over whether ZF promised only “preferred supplier” RFQ inclusion (ZF’s version) or promised exclusivity and the revenue that would come with being the supplier (East Coast’s version). Under Player v. Chandler and Stevens and Wilkinson of S.C., Inc. v. City of Columbia, that “meeting of the minds” question is typically for a jury—especially when the key evidence is conflicting deposition testimony about an oral conversation.
Terms/consideration dispute (compensation): Even assuming a contract existed, the majority found a separate material factual dispute about whether the agreement included monetary compensation for the drawings. The opinion pointed to evidence supportive of compensation, including: Geddes’s testimony that “revenue” would be derived from the role; THS’s initial inclusion of payment to East Coast in its payment request; and testimony suggesting it would be atypical for a “sole supplier” to provide detailed drawings without compensation. Because the bargain’s “price” (or mechanism of compensation) was disputed, the court could not decide breach or damages.

Importantly, the majority did not hold that East Coast proved a contract or proved entitlement to payment; it held only that a reasonable jury could find those facts on this record, which is enough to defeat summary judgment under Iraq Middle Mkt. Dev. Found. v. Harmoosh.

On equitable claims, the majority treated contract existence and terms as threshold issues: if a contract governs, it may foreclose unjust enrichment/quantum meruit (Gibson v. Epting) and may constrain promissory estoppel (Volvo Constr. Equip. N. Am., Inc. v. CLM Equip. Co.). Because the contract question could not be resolved on summary judgment, neither could the equitable theories.

3.3 Impact

Although unpublished and therefore “not binding precedent” within the Fourth Circuit, the decision is likely to be influential in disputes involving pre-award contributions (design drawings, specifications, and value engineering) in construction procurement.

Procurement-phase promises can create triable contract issues: Parties who request and use subcontractor designs for an RFQ/RFP process may face trial where there is credible testimony of an exclusivity-and-compensation understanding, even if the subcontractor later appears in the procurement chain (e.g., is initially named and later terminated).
“Benefit of the bargain” depends on defining the bargain: The district court’s approach—treating later subcontract award as necessarily satisfying the alleged deal—was rejected because the alleged deal included ongoing exclusivity/revenue expectations and payment for preparatory work. Future litigants should expect courts to scrutinize what was actually promised, not merely whether the plaintiff at one point was “named” or “selected.”
Documentation is not dispositive if oral testimony plausibly supplies missing terms: Meeting minutes and RFQ language did not eliminate factual disputes created by conflicting testimony about a private conversation. This strengthens the practical importance of clear, written pre-bid agreements addressing ownership and compensation for drawings.
Equitable claims may survive longer where contract coverage is uncertain: By treating contract existence/terms as threshold issues precluding summary judgment, the opinion suggests that plaintiffs may often reach trial (or favorable settlement leverage) on equitable claims when the existence or scope of a contract is genuinely disputed.

The dissent signals the countervailing risk: where the record shows the only promise was RFQ designation/sole-supplier status and that promise was performed, courts may view later nonpayment disputes as outside the owner–supplier relationship and within the contractor–subcontractor relationship. The key litigation battleground, therefore, is precise proof of the owner’s undertaking (and whether “revenue from the project” is a definite, agreed term or merely an expectation).

4. Complex Concepts Simplified

Summary judgment: A pretrial ruling where the judge decides there is no real factual dispute for a jury to resolve. If reasonable jurors could disagree about what happened (e.g., what was promised), summary judgment should be denied.
Genuine issue of material fact: A real dispute about a fact that matters to the legal outcome. Here, whether ZF promised compensation/exclusivity is “material” because it determines whether a contract was breached and whether damages are owed.
Meeting of the minds / mutual assent: Both sides must agree to the essential terms (what each side is giving and getting). If one side says “we promised exclusivity and revenue” and the other says “we only promised preferred-supplier RFQ inclusion,” a jury may need to decide whose account is credible.
Promissory estoppel: A doctrine that can enforce a promise (even absent a formal contract) when someone reasonably relies on it to their detriment. But it generally cannot be used to contradict an actual contract’s terms.
Unjust enrichment / quantum meruit: Restitutionary theories seeking payment for benefits conferred or work performed when there is no governing contract covering that benefit/work. If a contract exists and covers the subject, these claims are usually barred.
RFQ and “sole supplier”: An RFQ asks contractors to bid. Listing a “sole supplier” can mean bidders must price that supplier’s goods/services. The dispute here was whether that designation also implied (or was accompanied by) an enforceable promise that the supplier would actually get paid for pre-bid drawings and would not be displaced later.

5. Conclusion

The Fourth Circuit’s decision stands for a practical rule: where a construction owner’s alleged oral procurement-phase promises are supported by plausible testimony and surrounding conduct, disputes over contract formation and essential terms—especially compensation—are typically for the jury, making summary judgment inappropriate. Because the existence and scope of any contract also determine whether promissory estoppel, unjust enrichment, and quantum meruit may proceed, those equitable claims likewise should not be disposed of on summary judgment while the contract issues remain genuinely disputed.