Land O'Lakes v. Fredjos

Land O'Lakes sold milk and ice-cream to Fredjos under a requirements contract for several years without incident. However, early in 1987, Land O'Lakes discovered that Fredjos had a past due balance in excess of $330,000.

Land O'Lakes informed Fredjos in writing that it would stop shipping products until Fredjos paid its balance due. Fredjos made no payments, and, in September 1987, Land O'Lakes stopped shipping.

Fredjos' past due balance of over $330,000...

did not give Land O'Lakes reasonable grounds thinking that Fredjos would not fulfill its contractual obligation to pay for shipments of milk and ice-cream.

gave Land O'Lakes reasonable grounds thinking that Fredjos would not fulfill its contractual obligation to pay for shipments of milk and ice-cream.