The Business Court has once again granted summary judgment in favor of a purchaser of bulk-bleach from a Greenville manufacturer.
FSTI, Inc. v. PVS Minibulk, Inc., et al. (2026 Tex. Bus. 73 October 12, 2026) arose from a dispute over a purchase agreement whereby DPC, DPC’s predecessor in interest, agreed to buy 100% of the bleach FSTI produced at its Greenville facility (excluding FSTI’s production for retail and mini-bulk sales, i.e. less than 2, 850 gallons in a truckload delivery). The parties agreed that the Bulk Contract constituted an “output contract” governed by Chapter 2, UCC. They operated under the contract for two years, during which DPC bought more two million gallons of bleach. The parties communicated daily about bulk bleach orders, and witnesses testified that DPC bought all of the bulk bleach FSTI produced at the facility.
In February 2024, FSTI sold the plant to HASA, but excluded from the sale the Bulk Contract and another contract at issue in the suit. Defendants alleged that the exclusion of the contracts allowed FSTI to inflate the sales price by at least $15 million. FSTI didn’t inform DPC, a DPC affiliate that was a party to the other contract in the case, of the contract in advance but waited until the deal had closed. They did not, however, inform DPC. That task fell to DPC’s president. Things went on as usual for a month, but then the trouble commenced. In March 2024, DPC received a response to an order email stating that HASA was the vendor for the delivery and instructing that further orders be sent to a new contact at HASA. DPC followed these directions, and for a few months HASA delivered at the contract price. But soon thereafter HASA refused to honor that price, informing DPC that the Bulk Contract had been excluded from FSTI’s sale of the facility to HASA.
In March 2024, FSTI sued seeking a declaratory judgment that its sale of the facility did not result in a breach of the Bulk Contract. FSTI contended that it didn’t have an obligation to sell any bleach to DPC it it didn’t actually produce bleach, so long as FSTI acted in good faith. DPC responded by bringing counterclaims for repudiation and breach. It alleged that FSTI used the sale and the exclusion of the Bulk Contract to raise the price, “even though FSTI knew it would be unable to perform under the contracts once it sold the Greenville facility to HASA.” According to DPC, FSTI acted didn’t act in good faith or in accordance with commercial standards of fair dealing. FSTI responded by amending its pleadings to deny that DPC actually bought the facility’s total bulk bleach output, thus breaching the contract. DPC sought summary judgment on that claim. As we reported last week, in an opinion by Judge Andrews, the court granted DPC’s motion. See 2026 Tex. Bus. 69.
In this go-round, the court considered DPC’s breach of contract and repudiation counterclaims. FSTI moved for summary judgment on this claim, arguing that DPC breached the contract first by “failing to send FSTI shipping instructions each month, and DPC’s breach gave FSTI the right to cancel the contract …” (FSTI’s “termination defense”). DPC responded with its own MSJ contending that the termination defense failed as a matter of law because DPC didn’t breach the contract to begin with.
The Bulk Contract, among other things, required DPC to “furnish written shipping instructions for quantity required during the next succeeding month.” It further relieved FSTI from furnishing any product for which DPC had not given such instructions. As Judge Andrews observed, “[b]oth parties understood the Bulk Contract to require DPC to pick up the bleach at the Greenville facility, which DPC did.” After FSTI sold the plant to HASA, DPC continued to arrange for bleach purchases through FSTI at the contract price until FSTI informed it that further orders should be sent to HASA, the new vendor. (Eventually, HASA refused to honor the contract price.)
FSTI argued that the Bulk Contract required DPC to provide shipping instructions on the twentieth day of each month. In practice, DPC never did that, so FSTI alleged that this “monthly breach” gave it the right to cancel the contract. DPC, on the other hand, contended that the contract required shipping instructions only if FSTI shipped the bulk bleach to DPC. As noted above, the parties agreed that DPC always picked up the deliveries at the plant. In other words, DPC argued, FSTI made up its breach of contract claim for the litigation. After all, if FSTI thought DPC breached the contract every month for two years, why did they wait to cancel it until the month after it sold the plant? Additionally, FSTI didn’t even start asserting its breach of contract argument until several months into the lawsuit. Prior to that, it insisted that the contract was still in effect.
The court made short shrift of FSTI’s claim. The contract unambiguously identified DPC as responsible for all shipping under the contract. Although the contract might have required DPC to send monthly shipping instructions “in the context of the customer contracts from which these terms and conditions were copied and pasted,” it could not “reasonably be construed to require DPC to provide FSTI shipping instructions on the twentieth day of each month telling FSTI how much bleach to ship to DPC and how to ship it.” FSTI made a spurious argument that it “shipped” the bleach when it loaded it unto DPC’s trucks, but the court was having nothing of it. In any event, the contract didn’t require shipping instructions, and FSTI’s witness testified that she didn’t recall ever telling DPC that it had to send any.
In addition to that, the Bulk Contract required DPC to buy the entire output of the plant, not specific quantities at specific times. The parties communicated daily as the plant production, so everybody knew how much was coming and when. There was no question of any breach of the contract. The court granted DPC summary judgment.
