The case involves a dispute over a requirements contract between Empire Gas Corporation and American Bakeries Company. American Bakeries failed to order any equipment or propane from Empire Gas, despite signing a contract agreeing to do so. Empire Gas sued for breach of contract and won a jury verdict of $3,254,963. American Bakeries argues that Empire Gas could not have provided conforming goods, as the contract was for a Dutch-made conversion unit that was eventually deemed a failure. The court found that the "unreasonably disproportionate" provision in section 2-306(1) of the Uniform Commercial Code was unnecessary as the requirement of good faith already covers it. The court's error in instructing the jury requires a new trial on liability, unless it is clear that American Bakeries acted in good faith or bad faith. A buyer's decision to switch from one product to another does not excuse it from its obligation to purchase its "consumption requirements" of the original product from the seller, even if the buyer gives no reason for the change.

The dissenting opinion agrees with the majority that the error in the instruction regarding the "unreasonably disproportionate" proviso in Illinois' Uniform Commercial Code § 2-306(1) requires a reversal and new trial. However, the fundamental problem is that there was no evidence of either good or bad faith as those terms are normally defined. The plaintiffs failed to introduce specific evidence as to bad faith, which constituted a failure to carry its burden of proof on the issue of bad faith. Therefore, a new trial is necessary unless evidence of good or bad faith is presented. The court holds that evidence of a buyer's good or bad faith is necessary to determine liability under § 2-306, and a buyer's unreasonably disproportionate reduction of requirements is not enough to determine liability. However, the practical application of this standard to the trial of this case causes disagreement. If the seller has the burden of proof on the issue of the buyer's bad faith, the case should be reversed and remanded for a new trial because Empire Gas did not bear that burden and the trial record discloses no facts ordinarily found necessary by Illinois courts to prove bad faith. If a buyer's assertion of an unreasonably disproportionate reduction in their requirements creates a bad faith presumption which may be rebutted by the buyer's proof of good faith, the case should also be reversed and remanded for a new trial because this new rebuttable presumption of bad faith was not the Illinois rule under which the trial was conducted.