Heggblade Marguleas -Tenneco came up when Kern County Land Company (KCL) merged with another company known as Tenneco in 1967. In March of 1970, Heggblade-Maruleas merged with the new Tenneco and from then, they took over to dealing with agricultural products. Previously, Heggblade Marguleas dealt with agricultural products for many companies such as marketing processed potatoes for KCL which grew and processed potatoes and never marketed. It is from 1970, that the got the interest to learn more about potatoes and how they can thrive in the market. They planted about 2000 acres of potatoes and decided to market them to processors in the following year. They officials met with the managers of another company called Bell Brand that dealt with processing of potatoes where they agreed that 100, 000 bags of potatoes would be delivered in the harvest to the following year. It was therefore the fault of Sunshine Biscuits that HMT overplanted potatoes so that they would meet the requirement of Sunshine Biscuits to create trust between the two companies. Dotty who was the president of Sunshine Company went ahead to reassure HMT that they would take the agreed quantity yet they knew that HMT was not experienced in marketing of processing potatoes. The decline in demand came when the potatoes were already planted which was not predictable thus they could not take the whole amount as was agreed.
Heggblade Marguleas Tenneco (HMT) sued Sunshine Biscuit for breaching two contracts. One of those was with Blue Bell Potato Chip for a contract sealed on 15 October of 1970 to deliver potatoes by the following year. The other was Brand Bell Foods for failing to deliver 95,000cwt in 1971. The two led the Company to suffer a loss of eighty-seven thousand dollars. Sunshine Biscuits admitted that the contract existed but argued that it was not easy to predict the outcome during the time of contract. It was reasoned that Bell Brand had not gone against their yearly estimates thus it was acceptable that the year would have turned out not as expected. HMT felt that the verdict was unsatisfactory basing it that the court is not supposed to consider the tradition of the company in making of judgment hence they filed for an appeal since their motion was not considered.
On appealing it was argued that Sunshine Biscuits gave a specified quantity hence HMT had the right to be contentious. Comparing the previous cases, it was said that the contract does not give guidelines if the market declines and do not prohibit or give a go ahead for any adjustment. The court looked into the account that there was a possibility that the quantity was an estimate and could have been too high but again the HMT were not experienced was also to be considered. Looking into it, HMT were not ignorant as KCL were in such Business before and therefore could understand the market world. HMT was found to have failed in seeking of clarity to the inadequate instructions and hence the judges felt that they could not alter the verdict.
From the testimonies, it was clear that it was not the fault of Sunshine Biscuits to breach the contract but any group of people willing to join in any enterprise should first do through survey to know what goes on in the field so that they would not end up getting disappointed. It was also found that the HMT failed in that they took so much for granted and failed to seek clarification even when they received instructions from Sunshine Biscuit Company.