Macke Co. v. Pizza of Gaithersburg, Inc.
259 Md. 479, 270 A.2d 645 (Md. 1970)
- Gaithersburg had contracted with Virginia Coffee Service to provide their restaurants with beverage machines for five years. A year later, Virginia was bought out by Macke. Gaithersburg canceled the contract. Macke sued.
- The Trial Court found for Gaithersburg, Macke appealed.
- The Trial Court found that Virginia’s reputation was a key reason Gaithersburg contracted with them. Macke did not have that reputation, so the contract had fundamentally changed.
- Gaithersburg had considered Macke for the initial contract, but chose to contract with Virginia instead.
- The Court also found that damages could not be estimated since this was a requirements contract.
- The Appellate Court reversed and remanded for trial.
- The Appellate Court found that in the absence of a contrary provision, rights and duties under and executory bilateral contract may be assigned and delegated, with two exceptions:
- Contracts to provide personal services.
- Contracts where delectus personae is an element.
- Literally “choice of partners”.
- The case was remanded for trial to determine damages.
- In order for Gaithersburg to prevail, they would need to show that there is a material difference in the contract. It’s a very objective test.
- Compare to Fursmidt v. Hotel Abbey Holding Corp., which talks about objective vs. subjective standards.
- You can theoretically put a provision into a contract saying that the rights are not assignable. But it’s generally not a good idea to sign away that right, so it’s pretty rare.
