Michigan Supreme Court Sidesteps Stellantis Supplier Contract Ruling, Leaving Automotive Suppliers With Unanswered Questions

Michigan Supreme Court avoids landmark ruling

The Michigan Supreme Court has dismissed a closely watched appeal involving Stellantis and supplier Kamax Inc., declining to issue a ruling that many in the automotive supply chain hoped would clarify how far buyers can go when using flexible, percentage-based purchase commitments in long-term supply contracts.

The case, FCA US LLC v. Kamax Inc., had drawn significant attention from manufacturers, automotive suppliers, and business law observers because it was expected to address unresolved questions around how clearly a contract must define quantity to be enforceable under the Uniform Commercial Code (UCC). Instead, after the parties requested dismissal, the Court entered an order on April 22, 2026, dismissing the appeal.

For automotive suppliers, the most important takeaway is that the Court did not decide whether contracts requiring a supplier to provide “approximately 65%–100%” of a buyer’s requirements are sufficiently specific to create an enforceable requirements contract. That means the industry remains in a period of uncertainty, particularly in situations where supply agreements rely on blanket purchase orders, flexible volume commitments, or quantity ranges rather than fixed purchase obligations.

Why this case mattered to automotive suppliers

Automotive supply contracts often operate under long-term purchase arrangements where actual volumes fluctuate based on production needs, customer demand, program timing, and OEM schedules. That flexibility is commercially necessary, but it can create legal and financial risks when the contract does not clearly define what the buyer must purchase or what the supplier must provide.

The Kamax case was expected to test how far courts may go in accepting flexible quantity language. Unlike a contract with no meaningful quantity term, the Kamax dispute involved percentage-based language. The issue was whether a written contract for approximately 65%–100% of a buyer’s requirements could satisfy the UCC statute of frauds.

If percentage ranges are enforceable, buyers may retain broader flexibility in structuring supply commitments. If they are not, suppliers may have more room to challenge long-term obligations where the buyer’s commitment is too open-ended.

For now, the Michigan Supreme Court has not provided any more clarity to that question.

The practical impact: Uncertainty remains

The dismissal does not create a definitive rule for the automotive supply chain and instead leaves companies navigating an unsettled contract environment in which similar disputes may continue to yield different interpretations depending on the facts, contract language, and venue.

Suppliers may be left continuing to evaluate whether they are locked into long-term production obligations at unfavorable pricing. Buyers may be assessing whether their supply base is contractually obligated to support future production needs. Both sides may be operating under agreements drafted before the current legal landscape became so unsettled.

For middle-market manufacturers and automotive suppliers, the risk is ambiguous contract language that can affect pricing negotiations, working capital planning, margin forecasts, customer concentration risk, lender conversations, and even the ability to respond to future production changes.

Evaluate your supplier contract strategy

What suppliers and buyers should review now

Without a definitive high-court answer, companies should assume contract language will continue to be scrutinized closely in disputes.

We are encouraging our clients to review:

• Quantity terms: Does the agreement specify a fixed quantity, a clearly defined share of requirements, a percentage range, or no clear quantity at all?
• Blanket purchase orders: Are purchase orders being treated as long-term requirements contracts, or are they better understood as release-by-release arrangements?
• Terms and conditions: Do standard terms align with the commercial reality of the relationship, or do they create conflicting obligations across purchase orders, releases, and supplier agreements?
• Pricing and cost escalation clauses: Are there mechanisms to address inflation, raw material volatility, labor costs, tariffs, freight disruption, or other margin pressures?
• Termination and renegotiation rights: Do both parties understand when they can exit, renegotiate, suspend performance, or seek pricing relief?
• Documentation practices: Are amendments, price changes, and volume adjustments documented clearly enough to support the company’s position in a dispute?

Why this is bigger than one supplier lawsuit

Although FCA v. Kamax involved Stellantis and a specific supplier relationship, the issue extends to the industry as a whole. Long-term automotive supply agreements often sit at the intersection of commercial necessity and legal ambiguity. Buyers want flexibility and suppliers need predictability. Both sides require contracts that reflect the economics of the program.

Inflation, supply chain disruption, labor constraints, interest rate pressure, and shifting vehicle production strategies have exposed weaknesses in legacy contracts that were drafted for a more stable operating environment. The economic and industry specific volatility are making this balance harder to maintain.

The Michigan Supreme Court’s dismissal means the next major clarification may have to come from another case. Until then, companies could be making decisions in a gray area, and it is helpful to have a skilled strategic partner with extensive industry expertise that understands your operations and sees the entire industry landscape.

The bottom line for automotive suppliers

Do not wait until the next high profile lawsuit to determine whether contracts are enforceable, commercially sustainable, or aligned with current business conditions. A proactive contract review can help identify risk before it becomes a pricing dispute, production disruption, or litigation issue.

For suppliers already operating under margin pressure, they must determine whether a contract is legally enforceable, and as equally important, whether it still supports the economics, operational capacity, and long-term health of the business.

Strengthen your contract position before uncertainty becomes disruption

UHY’s Automotive Practice helps automotive suppliers evaluate contract terms, assess margin and operational risk, and make informed decisions in a changing legal and commercial environment. With more than 100 years of cumulative purchasing experience, our team brings practical insight into how supplier agreements affect performance, profitability, and long-term growth.

Contact UHY’s Automotive Practice to discuss how your contracts align with today’s business conditions.