Foxco Industries, Ltd. v. Fabric World, Inc.
United States Court of Appeals, Fifth Circuit
595 F.2d 976 (1979)
Fabric World (defendant) regularly bought "first quality" goods from Foxco (plaintiff), a large fabric supplier. After disputing the quality of an order and refusing partial payment, Fabric World later tried to cancel the remaining order once yarn prices dropped; Foxco said the order was already substantially completed, and Fabric World agreed to accept it only if it was flawless. Believing perfection impossible for an order that size, Foxco declined to ship and sued for breach. A jury awarded Foxco $26,000, relying partly on the Knitted Textile Association's published definition of "first quality" to interpret the contract term; Fabric World appealed, arguing that evidence should not have been admitted.
Whether a court errs in admitting evidence of industry custom and trade usage to help define a contract term, even where a party was unaware of the specific industry standard.