This section contains the nature of the case and procedural background.

Sonomed (D) manufactures and markets ultrasound devices used for ophthalmologic diagnosis. D makes two products called B-Scan and A-Scan. D is engaged in the optical business including the purchase and distribution of ophthalmic devices manufactured by other companies. P and D entered into a sales and distribution agreement on December 21, 1984. P was to become the exclusive worldwide distributor for D’s A and B Scan products for a period of three years. P paid $500,000 to D for this right and agreed to make annual minimum purchases of D product beginning in 1985. The deal went sour, and P had to sue D for breach in that D sold products directly in P’s exclusive territories. The district court found that D had wrongfully terminated the agreement by failing to cure its product delivery default and that P had acted properly in asserting its right to cease purchasing and to self-manufacture the D product. Both parties appealed the damages award.

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