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.