Global Supply Chain Rebound Brings Brand Manufacturer Disputes in 2026
Persistent disruption across the global supply chain has turned supply chain performance into a central litigation risk for beauty and fashion companies. Yet very few disputes in this space generate published decisions. To anticipate how to navigate missed delivery windows, upstream failures, and excuse defenses, in鈥慼ouse teams can glean valuable lessons from suppliers and manufacturers in other product categories.
Post鈥慏isruption Supply Chain Conflicts: Placeholder POs, Minimum Order Quantity, and When a Deal Is Binding
The first lesson is that courts are closely scrutinizing whether placeholder purchase orders and email exchanges create binding commitments, especially where minimum order quantity and capacity decisions are at stake. In Just.
Funky, LLC v. Think 3 Fold, LLC, 142 F.4th 1022 (8th Cir. 2025), a toy company won a bid to supply plush toys to Walmart and issued purchase orders to its supplier for more than 250,000 plush toys at $7 per unit, but each purchase order stated that pricing was 鈥渘ot finalized.鈥� The parties then negotiated by email: the buyer said it could go up to $7.50, the supplier countered at $9.50, and both sides linked their willingness to proceed to resolving that price gap. The supplier ultimately stated that it would treat the purchase orders as cancelled and would 鈥減roceed with other avenues to sell the product鈥� unless revised orders were issued. On these facts, the Eighth Circuit held there was no contract for the 鈥渓arger plush鈥� deal. There was no meeting of the minds on an essential term鈥� price鈥攁nd the court refused to apply UCC gap鈥慺illing, emphasizing that the disagreement was explicit rather than an 鈥渙pen term.鈥� The court concluded that large purchase orders combined with ongoing negotiations did not create a binding contract where the parties鈥� communications demonstrated that neither intended to proceed without agreement on price.
Azer Scientific LLC v. Quidel Corp., 2025 U.S. App. LEXIS 20387 (3d Cir. 2025), presents the mirror image. A diagnostics company sought a partner to fill tubes for at鈥慼ome test kits. Azer proposed to supply 10 million tubes per month for a year at specified pricing. On March 25, 2025, the buyer emailed Azer requesting an updated quote for that volume and stating it would send 鈥渨ritten approval to place orders for equipment today.鈥� Azer responded with the updated quote and asked the buyer to 鈥渃onfirm to me in writing that we are approved to order the equipment and that we have your commitment.鈥� The buyer replied: 鈥淧lease use this note as confirmation that we will be moving forward with the 2.5M/week (10M/month) commitment and to support Azer鈥檚 order of equipment. We are working on the purchase order now.鈥� In reliance, Azer wired roughly $290,000 to purchase custom filling equipment and began preparing to perform, with the buyer鈥檚 knowledge. A draft long鈥慺orm supply agreement followed, but it was never executed. When demand softened, the buyer decided to 鈥渞amp down鈥� and did not honor the twelve鈥憁onth volume.
The Third Circuit nonetheless affirmed summary judgment, holding that a binding contract was formed in the March 25 exchange. Under the governing state law, the essential terms 鈥� product, quantity, price, and duration 鈥� were sufficiently definite even though secondary terms such as quality control, insurance, and termination fees were still being negotiated for a more formal agreement. The court focused on outward manifestations. Azer explicitly requested written confirmation of the buyer鈥檚 鈥渃ommitment,鈥� the buyer provided it, followed it up with a signed purchase order consistent with that commitment, and Azer ordered equipment and began performance with the buyer鈥檚 knowledge and approval. The parties鈥� intent to draft a more formal contract later did not negate the binding effect of the email deal they had already made.
Beauty and fashion companies routinely face both scenarios. Brands frequently issue 鈥減laceholder鈥� purchase orders to secure production slots or retailer space while price is still being negotiated over email. Those purchase orders often lock in a minimum order quantity that factories rely on when planning capacity and spend. Suppliers may receive emails from brands saying they are 鈥渕oving forward鈥� with a specific minimum order quantity and price, enabling factories to justify tooling, molds, special fabrics, or dye lots, while legal teams work on a long鈥慺orm MSA and quality agreement. Just Funky suggests that where correspondence shows the parties are still deadlocked on an essential term such as price, courts are unlikely to enforce those preliminary orders. Azer suggests that when the correspondence shows explicit agreement on core terms and both sides act in reliance, courts are prepared to enforce the commitment even when the formal contract never materializes.
Force Majeure and Supply Chain Disruption: Courts Are Narrowing Excuse
The second lesson is that courts are tightening the standards for force majeure and are reluctant to treat broad 鈥渟upply chain disruption鈥� narratives as a free鈥慺loating excuse for nonperformance.
In Mieco L.L.C. v. Targa Gas Marketing L.L.C., 161 F.4th 828 (5th Cir. 2025), a seller invoked force majeure after a severe winter storm, pointing to significant supply chain disruption and force majeure declarations by its affiliates. The underlying standard鈥慺orm contract required the seller to make 鈥渞easonable efforts鈥� to avoid or overcome a force majeure event and expressly excluded 鈥渆conomic hardship,鈥� including the ability to sell at a higher price, as a basis to excuse performance. The court reversed summary judgment for the seller. holding that the seller bore the burden of proving it actually lost the supply it normally relied on, not merely that one category of source had failed. If the seller had historically purchased some portion of that supply on the open market, the fact that prices spiked during the storm was economic hardship, not force majeure, so long as supply remained available. General references to 鈥渟torm鈥� and 鈥渟upply chain disruption鈥� were insufficient to excuse nonperformance.
For beauty and fashion suppliers and brands, that reasoning points in the same direction. A manufacturer facing surging prices for materials cannot assume that a generic 鈥渟upply鈥慶hain crisis鈥� plus higher costs will excuse performance under a clause that excludes economic hardship and requires mitigation. Courts are increasingly likely to ask what alternative sources existed, how those compared with what the supplier normally used, and what concrete steps the supplier took to use them. Brands that want predictability should define force majeure tightly, carve foreseeable volatility and price spikes out of its scope, and specify what 鈥渞easonable efforts鈥� must include before performance can be suspended.
Component Shortages and Late Delivery Claims in the Global Supply Chain
The third lesson is that courts view timing and upstream component failures as commercially material, and they are wary of letting suppliers shift those risks downstream without clear contractual language.
In Habas Sinai Ve Tibbi Gazlar Istihsal A.S. v. Int鈥檒 Tech. & Knowledge Co., Inc., 2025 U.S. Dist. LEXIS 15555 (W.D. Pa. Jan. 29, 2025), a buyer agreed to purchase a defined quantity of goods from a seller under a United Nations Convention on Contracts for the International Sale of Goods (CISG) governed arrangement documented mainly through emails and a pro forma invoice. The contract set out a clear month鈥慴y鈥憁onth delivery schedule and pricing, and the buyer planned its operations around those deliveries. The seller, in turn, planned to source the goods from a particular upstream manufacturer. When that upstream manufacturer cancelled its orders, the seller failed to deliver and later argued that its obligation to the buyer was implicitly contingent on the upstream party鈥檚 acceptance and performance.
The court held that a binding contract existed on the terms reflected in the emails and invoice, and declined, at the summary鈥慾udgment stage, to treat the upstream manufacturer鈥檚 role as a condition precedent to the seller鈥檚 obligations where the contract did not say so. The buyer was allowed to pursue damages based on the higher prices it paid to cover in a tighter market. The court was not willing to let the seller recast its own sourcing decision as the buyer鈥檚 problem after the fact.
Beauty and fashion agreements are often built on similar structures: brands rely on specific fragrance houses, mills, component makers, or packaging suppliers that sit upstream in the global supply chain of their direct suppliers. Launch calendars and buying plans depend on agreed delivery windows. The logic of Habas suggests that courts will treat those delivery windows as commercially meaningful, even where the documentation is minimal, and will resist treating upstream failures as automatic excuses unless the contract clearly shifts that risk to the buyer. Brands forced to re鈥憇ource at higher cost, or to pay premiums to hit a season or retailer window, may have a credible basis to seek the difference where they can show reliance on the original schedule.
Practical Implications for Beauty and Fashion Brands
Across all of these cases, procedure and renegotiation tactics have a quiet, but important, role. In Habas, lack of clear written notice of cancellation, a long silence, and later references to the original schedule, created factual disputes about waiver and excuse that were enough to defeat summary judgment. In Just Funky, the parties鈥� own emails about 鈥渘ot finalized鈥� pricing and cancelled orders became the decisive evidence that no contract for the larger deal had ever been formed. In Azer, the parties鈥� written and practical behavior 鈥� explicit email confirmation, issuance of a purchase document, and substantial reliance expenditures 鈥� became decisive evidence that a binding commitment existed despite the absence of a signed master supply agreement.
For beauty and fashion companies that live on short product cycles and seasonal pressure, the practical message is clear: courts are willing to enforce email commitments and sparse documentation where there is clear agreement on core terms and reliance, but they will not rescue deals where the parties鈥� own communications show that essential terms were unsettled. Courts are narrowing excuse defenses based on supply chain disruption and price movements, treating delivery timing linked to production and launch as material, and hesitating to shift upstream risk away from the supplier absent clear language. Brands that draft and operate as though disruption and re鈥憈rading are now permanent features of the landscape 鈥� by being explicit about when email commitments are binding, tightening force鈥憁ajeure language, allocating upstream risk clearly, and using disciplined notice and amendment practices 鈥� will be far better positioned when the next fulfillment failure becomes a dispute.