Goodman v. Dicker
169 F.2d 684 (D.C. Cir. 1948)
- Dicker told the Goodman that he could have a franchise selling radios.
- In reliance on this promise, Goodman hired salesmen and geared up to sell radios. However, Dicker changed their minds and declined to give Goodman a franchise. Goodman sued for beach of contract.
- Despite the fact that there never was a legal contract, just a promise to form a contract.
- The Trial Court found in favor of Goodman. Dicker appealed.
- Goodman argued that Dicker, by their representation and conduct, induced him to incur expenses in preparing to do business under their franchise.
- Goodman was out a fair bit of money because of Dicker’s actions.
- Dicker unsuccessfully argued that the franchise, if granted, could be terminated at-will and imposed no duty to sell or buy radios, so there should be no liability.
- Dicker never had a duty to do anything, so how could they be liable for failing to live up to a duty?
- The Appellate Court affirmed.
- The Appellate Court found that the Trial Court was correct in awarding the Goodman’s damages based on how much he spent in reliance on having the franchise and being able to sell radios.
- However, the Court found that Dicker was not liable for Goodman’s lost profits on an initial order of radios.
- In a case like this, where the plaintiff is suing because of a reliance interest, the damages are limited to the loss sustained by expenditures made in reliance upon the assurance of a dealer franchise.