SALLY BEAUTY CO., INC v. NEXXUS PRODUCTS CO., INC. 801 F.2d 1001 (7th Cir. 1986). CASE BRIEF

SALLY BEAUTY CO., INC V. NEXXUS PRODUCTS CO., INC.

801 F.2d 1001 (7th Cir. 1986)

NATURE OF THE CASE: Sally (P) appealed from a summary judgment for Nexxus (D) in a contract action, upon the court's ruling that an exclusive distributorship contract between D and P's predecessor was one for personal services and therefore not assignable.

FACTS: In July 1981 P acquired Best Barber & Beauty Supply Company, Inc. in a stock purchase transaction and Best was merged into P, which succeeded to Best's rights and interests in all of Best's contracts. P, a Delaware corporation with its principal place of business in Texas, is a wholly-owned subsidiary of Alberto-Culver. P, like Best, is a distributor of hair care and beauty products to retail stores and hair styling salons. Alberto-Culver is a major manufacturer of hair care products and, thus, is a direct competitor of D in the hair care market. Best had an exclusive best efforts agreement to distribute and promote D hair care products in the Texas market. D refused to continue its agreement with Best after the merger. P sued D for breach of contract and a violation of antitrust laws. D moved for summary judgment on the breach of contract claim. That motion was granted because the trial court reasoned that the contract was not an ordinary commercial contract, but a contract based upon a relationship of personal trust and confidence between the parties. P appealed.

ISSUE:


RULE OF LAW:


HOLDING AND DECISION:


LEGAL ANALYSIS:





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