(CN) – Volvo Trucks wrongfully terminated a truck dealer’s franchise agreement, the Wisconsin Supreme Court ruled.
Wausau Truck Center sold heavy-duty Volvo and Peterbilt trucks until 2001, when it decided to stop selling Volvos and concentrate on Peterbilts.
Wausau did not finalize a deal to sell its Volvo franchise and, at the end of 2002, it decided to stay in the Volvo business.
Volvo sent Wausau a notice of breach, but it wasn’t enough to terminate Wausau’s franchise, as the dealership had until the end of 2003 to cure the breach.
Thirty days into 2004, Volvo decided that Wausau had not cured the breach and canceled the franchise agreement.
The Division of Hearings and Appeals overturned Volvo’s decision, ruling that Wausau had “recommitted itself to promoting Volvo products.”
Volvo appealed the decision to the circuit court, court of appeals and the state Supreme Court, but struck out each time.
The Supreme Court’s Justice Shirley Abrahamson said the dealer must prevail because the applicable definition of “cured” is the one found in contract law, not in the dictionary.
“We reject Volvo’s argument that ‘cured’ requires restoration to the status quo ante or repair all of the harm done by the breach. This is not a reasonable interpretation of the statute,” Abrahamson wrote.
“A reasonable interpretation of the statutory word ‘cured’ means the breaching party is to stop the offending conduct and substantially perform the contract.”