D was a fashion designer and hired P to basically be her agent, i.e. market her products, place endorsements on the designs of others, place her designs on sale.
P had the exclusive right to these privileges.
In return, P would receive 50% of all profits and revenues derived from the contracts he made.
The exclusive right was to last for a year and could be renewed yearly.
P says he kept contract, but D broke it by endorsing products without his knowledge and withholding the profits.
Procedural History:
P won in lower court.
Reversed on appeal.
Reversed again, found for P.
Issues:
Is a contract still valid if one party's detriment is implied, but is not an explicit element of the contract?
Holding/Rule:
A contract is still valid if one party's detriment is implied even if it is not an explicit element of the contract. (Good faith)
Reasoning:
The promise that the D market the designs of the P was implied through the business relationship.
Neither the P nor the D would make any profits unless the D marketed the products of the P.
Without the implied promise, the transaction would not have made sense.
The P's promise to pay the D half of the profits resulting from his marketing was a promise to use reasonable efforts to bring these profits into existence.
"The law has outgrown its primitive state of formalism when the precise word was the sovereign talisman, and every slip was fatal."
There was an implied promise on the part of the P to use reasonable efforts to market the D's designs and endorsements.
