Reaffirming UCC Gap-Filling and Corporate Officer Authority in Exclusive Distribution Agreements: Commentary on Alessi Equipment, Inc. v. American Piledriving Equipment, Inc.

Reaffirming UCC Gap-Filling and Corporate Officer Authority in Exclusive Distribution Agreements:
Commentary on Alessi Equipment, Inc. v. American Piledriving Equipment, Inc.

I. Introduction

This commentary analyzes the Second Circuit’s summary order in Alessi Equipment, Inc. v. American Piledriving Equipment, Inc., No. 22‑2317 (2d Cir. Nov. 21, 2025), affirming a judgment of the Southern District of New York (Magistrate Judge Judith C. McCarthy, by consent).

Although issued as a “summary order” (and therefore non‑precedential under Second Circuit Local Rule 32.1.1), the decision is doctrinally rich in several respects:

  • It applies the New York Uniform Commercial Code (N.Y. U.C.C.) to uphold the enforceability of an exclusive distribution agreement with open terms, relying on Article 2 “gap‑filling” provisions and the “best‑efforts” rule for exclusive dealing.
  • It reaffirms New York law on the actual and apparent authority of corporate presidents to bind the corporation in contracts within the ordinary course of business, even where a president is in transition out of the role.
  • It clarifies what constitutes sufficient proof of contract damages at trial, particularly:
    • Proof of lost discounts based largely on oral testimony and summary documentary evidence, and
    • The interaction between Rule 50(b), Rule 59(a), and New York’s “material deviation” standard for remittitur under CPLR 5501(c).

A separate, published opinion (not reproduced in the user’s text) addresses and rejects the defendant’s challenge to the award of prejudgment interest. This commentary therefore focuses on the issues resolved in the summary order: enforceability of the distributor agreement, corporate authority, and the sufficiency and size of the damages award.

II. Case Background

A. The Parties

  • American Piledriving Equipment, Inc. (APE): A manufacturer of heavy construction equipment, including a vibratory hammer known as the “Robovib” and other excavator‑mounted equipment.
  • Alessi Equipment, Inc. (Alessi): A long‑time distributor of APE’s products, operating principally in the Northeastern United States.

B. The 2012 Distributor Agreement

In 2012, the parties entered into what the court refers to as the “2012 Distributor Agreement.” Key features included:

  • Exclusivity in the Northeast: Alessi would be the exclusive distributor of APE’s Robovib and other excavator‑mounted equipment in the Northeast.
  • Commissions outside the territory: Alessi would receive a 2% commission on any such equipment sold by APE outside the Northeast.
  • First option on rentals and sales: In return, APE would “direct all Robovib and excavator rentals and sales to Alessi as a first option.”
  • Service obligations: Alessi would provide service and setup, or pay APE’s service department to do so.
  • Automatic renewal and cancellation: The contract renewed automatically each year unless cancelled in writing, subject to a two‑year cancellation period.

The agreement did not expressly specify:

  • Quantity of goods to be sold,
  • Detailed pricing terms (beyond the 2% commission concept), or
  • Some logistics details such as delivery terms and time of performance.

Nevertheless, the parties performed for some time under this and earlier related agreements (including a 2004 agreement granting Alessi exclusive Robovib rights in the Northeast).

C. The Dispute

Alessi alleged that APE:

  • Breached the 2012 Distributor Agreement by selling Robovib and other excavator‑mounted equipment directly to third parties in Alessi’s exclusive Northeast territory, rather than routing such sales to Alessi as agreed; and
  • Failed to honor a 20% discount Alessi historically received on purchases of equipment and parts from APE, thereby overcharging Alessi on its own purchases.

APE defended on multiple grounds, including that:

  • The 2012 agreement was not an enforceable contract (it allegedly lacked consideration and material terms);
  • The APE signatory, then‑president John White, lacked authority to bind APE at the time of execution;
  • The proof of damages, especially regarding the alleged 20% discount on parts, was insufficient; and
  • The jury’s damages award was excessive, warranting remittitur or a new trial.

D. Procedural History

  1. The parties consented to have the case tried by a magistrate judge under 28 U.S.C. § 636(c).
  2. The district court:
    • Granted summary judgment to Alessi on liability—that the 2012 Distributor Agreement was enforceable and APE had breached it.
    • Held a four‑day jury trial on damages, resulting in an award of $920,846.70 in favor of Alessi, offset by $52,505.92 owed to APE under a 2016 rental agreement.
    • Denied APE’s post‑trial motions for judgment as a matter of law (Rule 50(b)), or alternatively for a new trial or remittitur (Rule 59(a)).
    • Granted prejudgment interest to Alessi.
  3. APE appealed, raising:
    • The enforceability of the 2012 Distributor Agreement and White’s authority (summary judgment),
    • The sufficiency of the damages evidence and the size of the award (Rule 50(b) and 59(a)), and
    • The propriety of prejudgment interest.
  4. The Second Circuit:
    • Affirmed the prejudgment interest ruling in a separate published opinion (not included here), and
    • Addressed the remaining issues in the present summary order, ultimately affirming the judgment in full.

III. Summary of the Second Circuit’s Rulings

A. Enforceability and Breach of the 2012 Distributor Agreement

The court held that:

  • The 2012 Distributor Agreement was an enforceable contract for the sale of goods under the New York UCC, even though it omitted explicit quantity and certain price/delivery terms.
  • The N.Y. U.C.C.’s gap‑filling provisions (e.g., §§ 2‑204(3), 2‑305, 2‑308, 2‑309) supplied the missing terms, and § 2‑306(2) imposed best‑efforts obligations on both parties in an exclusive dealing arrangement.
  • APE breached the agreement by selling equipment covered by the contract directly to third parties in Alessi’s exclusive Northeast territory.

B. Authority of APE’s President to Sign the Agreement

APE argued that John White lacked authority to bind APE because he had given notice and “transitioned out of his role” as president by 2012. The court rejected this argument and held that:

  • As a matter of law, White possessed actual authority under New York’s “ordinary business rule” for corporate presidents, because the 2012 agreement was within the ordinary course of APE’s business and there was no evidence that his authority to enter such contracts had been formally withdrawn.
  • In the alternative, there was no genuine dispute that White also had apparent authority, given APE’s conduct and Alessi’s reasonable reliance on White’s long‑standing role and prior dealings.

C. Sufficiency of the Damages Evidence (Rule 50(b))

On APE’s motion for judgment as a matter of law:

  • The Second Circuit held that ample evidence supported the jury’s damages award, particularly as to:
    • APE’s failure to grant the 20% discount on parts purchases by Alessi, and
    • APE’s direct sales in Alessi’s exclusive territory.
  • Testimony by Alessi’s principal that he “always” received a 20% discount, corroborated by partial invoice evidence and a summary exhibit (PX‑9) of “P‑prefix” parts invoices without discounts, provided a “stable foundation for a reasonable estimate” of damages, satisfying New York’s standard (citing Tractebel Energy Mktg., Inc. v. AEP Power Mktg., Inc.).
  • Given the applicable standard—that JMOL may be granted only where evidence for the verdict is virtually nonexistent or the movant’s evidence is overwhelming—the district court correctly denied APE’s Rule 50(b) motion.

D. Denial of New Trial or Remittitur (Rule 59(a))

APE also moved for a new trial or remittitur, arguing the verdict was excessive. The Second Circuit:

  • Applied deferential abuse‑of‑discretion review to the Rule 59(a) ruling.
  • Noted that, under New York law, remittitur is appropriate only when damages “deviate materially from what would be reasonable compensation” (N.Y. CPLR 5501(c)).
  • Approved the district court’s methodology:
    • The court calculated the maximum reasonable damages (based on PX‑9 and other evidence) at $1,022,830.31, including up to $163,633.55 for parts‑related damages and the remainder for direct sales and equipment‑related discounts.
    • The jury’s award of $920,846.70 fell well within that range, and below the $1.5 million sought by Alessi.
  • Held that the verdict neither constituted a “seriously erroneous result” nor materially deviated from reasonable compensation.

E. Prejudgment Interest (Addressed Separately)

The summary order notes that APE’s challenge to the award of prejudgment interest was rejected in a separate published opinion, and that argument was deemed “meritless.” Without that opinion’s text, we know only that the Second Circuit affirmed the district court’s grant of prejudgment interest to Alessi.

IV. Detailed Analysis

A. Contract Enforceability Under the New York UCC

1. Classification of the 2012 Agreement as a UCC Article 2 Contract

The court treats the 2012 Distributor Agreement as a “contract for sale” of goods governed by Article 2 of the N.Y. U.C.C. (see N.Y. U.C.C. §§ 2‑102, 2‑106(1)), citing:

  • Bausch & Lomb Inc. v. Bressler, 977 F.2d 720, 726 (2d Cir. 1992), and
  • Gerard v. Almouli, 746 F.2d 936, 939 (2d Cir. 1984).

These cases recognize that distribution and exclusive dealing arrangements concerning goods—especially where the distributor’s role centers on marketing and reselling tangible products—fall within Article 2.

2. Open Terms and UCC Gap‑Filling (§ 2‑204(3), § 2‑305, § 2‑308, § 2‑309)

APE’s principal objection was that the 2012 Distributor Agreement was not a contract at all because it allegedly lacked consideration and omitted material terms such as:

  • quantity,
  • definite price provisions beyond commissions, and
  • specific delivery arrangements.

The Second Circuit, echoing the district court, rejects this argument by invoking several core UCC doctrines:

  • UCC § 2‑204(3): Formation in General
    A contract for sale does not fail for indefiniteness if:
    • the parties intended to make a contract, and
    • there is a reasonably certain basis for giving an appropriate remedy.
    Even where terms are left open, courts can fill the gaps if intent and a remedial basis exist.
  • UCC § 2‑305(1): Open Price Term
    When the parties intend a contract but fail to specify price, the price is a “reasonable price at the time of delivery”. This directly answers objections that absence of a detailed price schedule dooms enforceability.
  • UCC § 2‑308: Place for Delivery
    Absent specific agreement, delivery occurs at the seller’s place of business, supplying default delivery terms.
  • UCC § 2‑309(1): Time of Shipment or Delivery
    Where no time is stated, shipment or delivery will occur within a reasonable time.

In line with Enercomp, Inc. v. McCorhill Pub., Inc., 873 F.2d 536, 546 (2d Cir. 1989), the court emphasizes that “many a gap in terms can be filled—and should be filled—where it is clear that the parties intended to form a contract and to bind themselves to render a future performance.”

Applied to the 2012 agreement, the court concludes:

  • The parties clearly intended to be bound:
    • They specified the exclusive territory and subject matter (Robovib and excavator‑mounted equipment in the Northeast).
    • They assigned reciprocal obligations (APE to route business to Alessi; Alessi to perform and/or pay for service).
    • They established a commission structure for out‑of‑territory sales.
    • They adopted continuing business terms via automatic renewal and cancellation procedures.
  • The missing price and logistics details are precisely the sort of gaps Article 2 is designed to fill, not grounds to declare the agreement void.

3. Exclusive Dealing and Best‑Efforts Obligations (§ 2‑306(2))

A more nuanced issue is the lack of an express quantity term. Under traditional common‑law contract principles, absence of quantity can defeat enforceability. Article 2, however, specifically addresses this in the context of requirements, output, and exclusive dealing contracts.

N.Y. U.C.C. § 2‑306(2) provides:

“A lawful agreement by either the seller or the buyer for exclusive dealing in the kind of goods concerned imposes unless otherwise agreed an obligation by the seller to use best efforts to supply the goods and by the buyer to use best efforts to promote their sale.”

The court applies § 2‑306(2) to hold that:

  • The exclusive distribution arrangement between APE and Alessi constituted an “exclusive dealing” agreement within the meaning of § 2‑306(2).
  • Even in the absence of an explicit quantity term, the statute implies reciprocal best‑efforts duties:
    • APE: to use best efforts to produce and supply the covered equipment.
    • Alessi: to use best efforts to promote and sell that equipment in the Northeast.
  • These best‑efforts obligations substitute for a traditional quantity term and create a sufficiently definite framework to enforce the contract.

Thus, the 2012 Distributor Agreement satisfies Article 2 enforceability requirements despite open terms, and APE’s argument that the agreement is void because of incompleteness is rejected as a matter of law.

4. Finding Breach on Summary Judgment

Once the agreement is deemed enforceable, the breach analysis is relatively straightforward:

  • The agreement made Alessi the exclusive distributor of the covered products in the Northeast.
  • APE sold covered equipment directly to third parties in that territory, rather than directing such business to Alessi as required (“as a first option”).

With no genuine dispute of material fact on these points, the district court correctly granted summary judgment for Alessi on liability. The Second Circuit, reviewing de novo (citing Lucente v. IBM, 310 F.3d 243, 253 (2d Cir. 2002)), affirms that ruling.

The separate issue of the alleged 20% discount is treated differently. Because that discount was not expressed in the 2012 agreement itself, the court held—correctly—that its existence and scope presented factual questions about course of dealing, course of performance, or usage of trade, properly reserved for the jury under:

  • N.Y. U.C.C. § 2‑202: The parol evidence rule, which allows terms to be “explained or supplemented” by:
    • course of performance,
    • course of dealing,
    • usage of trade, and
    • consistent additional terms, unless the writing is intended as a complete and exclusive statement.

Thus, the court drew a careful doctrinal line:

  • Enforceability and territorial exclusivity were resolvable as a matter of law via the UCC and the agreement’s text; whereas
  • The alleged 20% discount required fact‑finding because it depended on extrinsic evidence and inferences from the parties’ course of dealing.

B. Authority of Corporate Officers: Actual and Apparent Authority

1. Actual Authority and the “Ordinary Business Rule”

APE argued that John White, the signatory to the 2012 agreement, lacked actual authority because he had “already given notice” and “transitioned out” of the presidency at the time of execution.

The Second Circuit applies well‑established New York agency law:

  • Actual authority exists where the principal grants an agent power—expressly or implicitly—to enter contracts on its behalf (citing Highland Capital Mgmt. LP v. Schneider, 607 F.3d 322, 327 (2d Cir. 2010)).
  • Under New York’s “ordinary business rule” (also applied in federal cases), a corporate president is presumed to have authority to bind the corporation in transactions within the ordinary course of the company’s business (citing Scientific Holding Co. v. Plessey Inc., 510 F.2d 15, 23‑24 (2d Cir. 1974); Odell v. 704 Broadway Condo., 728 N.Y.S.2d 464, 468‑69 (1st Dep’t 2001)).

Applying these principles, the court emphasizes:

  • It is undisputed that White was still APE’s President at the time he signed the 2012 agreement.
  • The agreement clearly involved transactions in the ordinary course of business:
    • White originally brokered the business relationship between APE and Alessi in the mid‑1990s.
    • He executed a similar 2004 agreement granting Alessi exclusive and non‑exclusive sales rights for the Robovib.
  • There is no evidence that APE formally revoked or limited White’s authority to negotiate or sign such agreements before 2012.

Given this, the court concludes that no reasonable factfinder could find that White lacked actual authority to sign the 2012 Distributor Agreement, and summary judgment on this issue was proper.

2. Apparent Authority as an Independent Ground

The court also holds, in the alternative, that White possessed apparent authority as a matter of law.

Under New York law (citing Goldston v. Bandwidth Tech. Corp., 859 N.Y.S.2d 651, 655 (1st Dep’t 2008); Hallock v. State of New York, 485 N.Y.S.2d 510 (N.Y. 1984); F.D.I.C. v. Providence Coll., 115 F.3d 136, 140‑41 (2d Cir. 1997)):

  • Apparent authority exists when:
    • The principal’s conduct creates the appearance that the agent is authorized to act, and
    • A third party reasonably relies on that appearance, without a duty to inquire further.
  • The focus is on manifestations by the principal, not the agent’s own statements.

The court identifies several critical facts:

  • APE’s conduct over many years—allowing White to negotiate and sign key distribution agreements—created the appearance of continuing authority.
  • There is no evidence that APE notified Alessi, or the public, that White’s authority had been curtailed.
  • Given White’s role in brokering and maintaining the relationship, Alessi had no duty to inquire about the scope of his authority absent some red flag or contrary communication.

Thus, even if White’s internal authority had been restricted (for which there was no evidence), APE’s outward manifestations and Alessi’s reasonable reliance independently establish apparent authority.

3. Practical Implications

The decision sends a clear signal to corporate principals:

  • Merely internal or informal changes in an officer’s role do not automatically limit that officer’s apparent authority.
  • If a company wishes to prevent an outgoing or transitioning executive from binding it, it must:
    • Formally withdraw or limit authority, and
    • Take reasonable steps to communicate those limitations to third parties who have historically dealt with the officer.

Absent such steps, courts applying New York law will generally hold the corporation bound, especially where the transaction is in the usual course of business and the third party had no reason to suspect a limitation on authority.

C. Proof of Damages and Post‑Trial Motions

1. Rule 50(b) Standard and Application

The Second Circuit reiterates the stringent standard governing a motion for judgment as a matter of law under Rule 50(b) (citing Brady v. Wal‑Mart Stores, Inc., 531 F.3d 127, 133 (2d Cir. 2008)):

  • JMOL is appropriate only if:
    • there is a “complete absence of evidence” supporting the verdict such that the jury’s findings could only be based on “sheer surmise and conjecture,” or
    • “the evidence in favor of the movant is so overwhelming that reasonable and fair‑minded persons could not arrive at a verdict against it.”
  • On appellate review, the evidence is viewed in the light most favorable to the non‑movant, with all inferences and credibility assessments made in the verdict’s favor (citing Wiercinski v. Mangia 57, Inc., 787 F.3d 106, 112‑13 (2d Cir. 2015)).

APE targeted particularly the portion of the verdict awarding damages for:

  • APE’s failure to provide the 20% discount on parts purchased by Alessi.

The Second Circuit finds the evidence more than sufficient:

  • Testimony by Gerald Alessi:
    • He “always” received a 20% discount when purchasing from APE.
    • He received the discount on both equipment and parts.
    • Some invoices from 2012–2017 reflected the 20% discount for parts, but by about 2013–2014, the discount ceased, prompting repeated calls to request its application.
  • Plaintiff’s Exhibit 9 (PX‑9):
    • A summary listing of transactions with invoice numbers beginning with “P,” which witnesses testified signified parts purchases.
    • These invoices did not reflect the 20% discount.

From this, the jury could reasonably infer:

  • APE had agreed—by course of dealing—to provide a 20% discount on both equipment and parts;
  • Alessi ceased receiving that discount consistently by 2013 or 2014; and
  • All parts transactions represented on PX‑9 should have been discounted but were not.

Under New York law, contractual damages need only be proven with “reasonable certainty,” not mathematical precision, provided there is a “stable foundation for a reasonable estimate” of loss (citing Tractebel Energy Mktg., Inc., 487 F.3d 89, 110–11 (2d Cir. 2007)). The court finds that standard satisfied and upholds the denial of JMOL.

2. Rule 59(a) New Trial and Remittitur

Under Rule 59(a), a new trial is appropriate only if the verdict is against the weight of the evidence such that the court is convinced it is a “seriously erroneous result” or a “miscarriage of justice” (citing Hygh v. Jacobs, 961 F.2d 359, 365 (2d Cir. 1992)).

When the challenge is to the size of the damages award under state‑law claims, federal courts must apply the state’s remittitur standard—in New York, N.Y. CPLR 5501(c), which permits reduction of an award only if it “deviates materially from what would be reasonable compensation” (citing Cross v. N.Y.C. Transit Auth., 417 F.3d 241, 258 (2d Cir. 2005); Earl v. Bouchard Transp. Co., 917 F.2d 1320, 1328 (2d Cir. 1990)).

Here, the district court undertook a careful reconstruction:

  • From PX‑9 and other evidence, the court concluded that the maximum reasonably supportable amount for parts‑related damages was $163,633.55.
  • Adding this to its calculations for:
    • APE’s direct sales of equipment and parts to third parties in Alessi’s exclusive territory, and
    • APE’s failure to provide the 20% discount on equipment purchases,
    the court arrived at a total maximum damages figure of $1,022,830.31.
  • The jury’s award of $920,846.70 was:
    • below this maximum, and
    • also well below the $1.5 million Alessi requested in argument.
  • Although the court noted that a “different method” of calculating damages might yield a figure closer to $825,876.06, such differences fell squarely within the jury’s permissible fact‑finding discretion.

The Second Circuit agrees that:

  • The verdict does not materially deviate from reasonable compensation.
  • There is no basis to view the outcome as seriously erroneous or unjust.
  • Critically, APE’s failure to introduce the actual invoices or identify inconsistencies for the jury undermines its complaint about imprecision. As Tractebel emphasized, once liability is found, the “burden of uncertainty as to the amount of damage is upon the wrongdoer.”

Thus, denying a new trial or remittitur was well within the district court’s discretion.

D. Standards of Appellate Review and Magistrate‑Judge Jurisdiction

The panel also illustrates standard appellate review principles:

  • Summary Judgment: Reviewed de novo, with all reasonable inferences drawn in favor of the non‑movant (citing Lucente, 310 F.3d at 253).
  • Rule 50(b) JMOL: Reviewed de novo, but under a highly deferential substantive standard (favoring the verdict).
  • Rule 59(a) New Trial/Remittitur: Reviewed for abuse of discretion, with New York’s “material deviation” standard applied to the size of the damages award.

The court also notes in a footnote that the parties consented to have the case decided by a magistrate judge under 28 U.S.C. § 636(c). This consent gives the magistrate judge full authority to enter final judgment, which is then appealable to the court of appeals in the same manner as a judgment by a district judge.

V. Complex Concepts Simplified

Below are brief, plain‑language explanations of some key legal concepts from the opinion.

1. Exclusive Distribution Agreement

An exclusive distributor is given the sole right to sell a manufacturer’s products in a defined territory or customer segment. The manufacturer promises not to sell directly or through other distributors in that territory. In return, the distributor typically agrees to market and support the products and sometimes to meet certain performance targets or use “best efforts” to promote sales.

2. UCC Gap‑Filling and Open Terms

The UCC recognizes that businesspeople often form binding deals without negotiating every detail. When:

  • There is clear intent to contract, and
  • The court can identify a reasonable remedy if things go wrong,

Article 2 allows courts to:

  • Infer a reasonable price if no price is specified (based on market conditions at delivery),
  • Assume standard delivery terms (e.g., at the seller’s place of business), and
  • Assume performance will occur within a reasonable time.

These “gap‑fillers” prevent parties from escaping clearly intended deals simply because they left some details open.

3. Best‑Efforts Obligations in Exclusive Dealing

In a UCC exclusive dealing contract, the law automatically implies that:

  • The seller will use best efforts to supply the goods, and
  • The buyer (distributor) will use best efforts to promote and sell them.

“Best efforts” does not require heroic measures, but it does require serious, good‑faith efforts consistent with industry practice and the parties’ expectations. It prevents either side from sitting on its hands or sabotaging the venture.

4. Actual vs. Apparent Authority

  • Actual authority: The agent truly has power granted by the principal:
    • Expressly (e.g., in a written corporate resolution or job description), or
    • Impliedly (because of the nature of the agent’s position and prior practices).
  • Apparent authority: Even if the agent lacks actual authority, the principal’s conduct leads a reasonable third party to believe the agent is authorized. If the third party reasonably relies on that appearance, the principal may be bound.

A corporate president normally has both actual and apparent authority to enter contracts in the ordinary course of business unless the company clearly limits that authority and communicates those limits to outsiders.

5. Summary Judgment

Summary judgment is a procedural device used to decide a case (or part of it) without trial. It is granted only if:

  • There is no genuine dispute of material fact—i.e., the key facts are so one‑sided that no reasonable jury could find for the other side; and
  • The moving party is entitled to judgment as a matter of law.

The judge must view all evidence and draw all reasonable inferences in favor of the non‑moving party.

6. Rule 50(b) Judgment as a Matter of Law

After a jury trial, a party can move under Rule 50(b) to set aside the verdict on the ground that no reasonable jury could have reached it on the evidence presented. This is an extremely high bar:

  • The verdict must be wholly unsupported by evidence, or
  • The evidence against the verdict must be overwhelming.

Courts give great deference to the jury’s role in assessing credibility and drawing inferences.

7. Rule 59(a) New Trial and Remittitur

  • A new trial may be granted if the verdict is contrary to the weight of the evidence or results in a miscarriage of justice.
  • Remittitur is a procedure where the court offers the prevailing party a choice:
    • Accept a reduced damages award that the court deems reasonable, or
    • Face a new trial on damages.

Under New York law, a damages award is reduced via remittitur only if it “deviates materially” from what would be reasonable compensation.

8. “Stable Foundation for a Reasonable Estimate” of Damages

New York law does not require exact proof of damages. Once a breach is established:

  • The plaintiff must provide a reasonably reliable basis for estimating the loss, and
  • Any remaining uncertainty is generally resolved against the breaching party, who created the uncertainty (for example, by failing to keep or produce complete records).

VI. Impact and Broader Significance

A. Contract Drafting and Distribution Relationships

Though non‑precedential, the order is likely to be cited for its persuasive value, especially in future disputes over distribution agreements governed by New York law. It underscores several important points:

  • Open‑term distribution agreements are enforceable. Manufacturers and distributors sometimes operate with relatively brief or loosely drafted agreements. This decision reaffirms that such agreements can be binding under the UCC, provided there is clear intent to contract and a reasonably certain basis for remedies.
  • Exclusive dealing carries implied best‑efforts duties. Parties to exclusive distribution relationships should assume that even if “best efforts” language is not expressly stated, the law may imply that duty. This influences both performance and risk allocation.
  • Course of dealing matters. The 20% discount dispute illustrates how longstanding practices (even if not written into the contract) may become enforceable terms via the UCC’s treatment of course of performance and course of dealing.

B. Corporate Governance and Contract Authority

The decision offers a cautionary tale for corporate governance:

  • Companies transitioning leadership must proactively manage apparent authority. If an outgoing executive remains in title or appears to be acting on the company’s behalf, contracts signed in the ordinary course may bind the company regardless of any internal limitations.
  • Third parties are not generally required to ferret out internal corporate politics. As long as the transaction looks normal and the officer’s role has not been publicly curtailed, reliance on that officer’s authority will often be deemed reasonable.

C. Litigation Strategy and Proof of Damages

For litigators, Alessi provides practical lessons:

  • Testimonial evidence has real weight. Credible, uncontradicted testimony about customary discounts, coupled with even incomplete documentary corroboration (such as summary exhibits like PX‑9), can meet the “stable foundation” test.
  • Failure to produce records can backfire. APE’s decision not to introduce its own invoices weakened its attack on the precision of Alessi’s damages calculations and invoked the principle that uncertainty is borne by the wrongdoer.
  • Remittitur is not a forum for relitigating the case. So long as the verdict falls within a range supported by the evidence and does not materially deviate from reasonable compensation, appellate courts will rarely disturb it.

D. Persuasive Authority Despite Non‑Precedential Status

Although Second Circuit summary orders, by rule, lack precedential effect, they are often:

  • Cited as persuasive authority in briefs and opinions, particularly when they synthesize existing precedent effectively; and
  • Valued by district courts within the Circuit for guidance on the application of settled law to similar factual settings.

This order’s treatment of UCC gap‑filling, exclusive‑dealing obligations, corporate authority, and damages proof will likely be influential in future commercial disputes involving similar issues under New York law.

VII. Conclusion

Alessi Equipment, Inc. v. American Piledriving Equipment, Inc. is formally a non‑precedential summary order, but it crystallizes several important strands of New York commercial law:

  • It reaffirms that exclusive distribution agreements governed by the New York UCC remain enforceable even where significant terms—such as quantity, price details, and delivery specifications—are left open, so long as the parties intended to be bound and the UCC’s gap‑filling mechanisms can supply the missing elements.
  • It underscores the robust authority of corporate presidents to bind their corporations in ordinary course transactions, and the continuing potency of apparent authority when companies fail to communicate internal changes to the outside world.
  • It illustrates how New York courts approach damages proof in commercial cases: requiring a stable evidentiary foundation but accepting reasonable estimates supported by testimony and summary documentation, especially where the breaching party has not produced better records.
  • It confirms the limited scope of appellate interference with jury verdicts on damages, applying New York’s “material deviation” standard and deferring to the trial court’s reasoned assessment of the evidence.

Taken together, these holdings offer both contracting parties and litigators a clear—if non‑binding—roadmap for how the Second Circuit is likely to analyze similar disputes involving exclusive distribution agreements, corporate authority, and damages under New York law.

Case Details

Year: 2025
Court: Court of Appeals for the Second Circuit

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