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Scavenger, Inc. v. GT Interactive Software, Inc.

    Brief Fact Summary. A contract between a video game developer and distributor was at issue.

    Synopsis of Rule of Law. A divisible contract allows a non-breaching party to recover payment from those portions of the contract it performed, although it did not perform the entire contract.

     

    Facts. Scavenger, Inc. ("Scavenger") is a computer game developer.  GT Interactive Software, Inc. ("GT") is a computer-game distributor.  Scavenger brought an action against GT.  The parties' contract required the delivery of four different CD-ROM games.

    Issue. Is the contract divisible?

    Held. Yes.  As such, the "plaintiff's right to recover payments guaranteed under the contract for the two CD-ROM games delivered to defendant was not impaired by plaintiff's failure to deliver the two remaining games."  Further, "defendant's claim that plaintiff breached the parties' agreement by failing to deliver the CD-ROM games on time had been waived by defendant's requests for significant modifications in the games and by defendant's acceptance and marketing of the games without objection."

    Discussion. This case offers a basic example of how courts construe divisible contracts.


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