Palazzetti Import/Export, Inc., v. Morson
2001 WL 1568317 (S.D.N.Y.) (2001)
- Palazzetti, a designer of fancy furniture gave Morson, a dealer the exclusive right for 10 years to sell furniture in Boston.
- Morson was required to pay Palazzetti $100k for the rights, plus a percentage of each sale.
- After two years, Morson stopped selling the furniture. Palazzetti sued for breach of contract.
- Morson argued that the contract didn’t require him to sell any furniture at all, just that if he did sell some, he’d give some of the profits to Palazzetti.
- Morson argued that the consideration in this case was the $100k, not the reasonable efforts to sell the furniture.
- Palazzetti argued that it was an implied provision that Morson would use reasonable efforts in selling the furniture.
- Palazzetti argued that it was an exclusive right so he is worse off without reasonable efforts. Also, the $100k could be trivial compared to the profits he was expecting from the percentage of sales.
- The Trial Court found Palazzetti.
- The Trial Court found that the $100k was a trivial amount compared to the amount Palazzetti would have received if Morson had been selling the furniture (estimated at $3M).
- Compare this case to Wood v. Lucy, Lady Duff-Gordon (118 N.E. 214 (N.Y. 1917)) which said that you have to look at the entirety of the contract in order to come to a conclusion.