Swartz v. War Memorial Commission of Rochester

Brief Fact Summary. An individual was granted the right to provide all concessions to a sporting arena.  At the time of the contract, the arena did not allow the sale of alcohol, but the contract provided the individual with the right to sell alcohol if the ban was ever lifted.  The ban was lifted, but the individual refused to sell alcohol.

Synopsis of Rule of Law. Language can be construed as a condition if the parties' "intent and object" requires such treatment.

Facts. The Plaintiff, Swartz (the "Plaintiff"), entered into a contract with the Defendant, War Memorial Commission of Rochester (the "Defendant"), for the right to exclusively provide food and refreshments at the Defendant's sports arena.  At the time of the contract, the Defendant did not allow for the sale of beer and ale in the arena, but if at some time in the future the ban was lifted the Plaintiff would have the right to make such sales.  On November 15, 1965, the Defendant lifted the ban on the sale of beer, but the Plaintiff chose not to sell alcoholic beverages.  One provision of the contract required the Plaintiff to obtain all necessary permits or licenses.  On November 30, 1965, the Defendant issued an ultimatum and told the Plaintiff if they did not make an application to sell beer and ale within 30 days, the Plaintiff would not be allowed to sell anymore concessions in the building.  The Plaintiff brought an action for declaratory judgment to clarify his rights under the contract.

Issue. Was there an implied condition in the contract requiring the Plaintiff to obtain a license to sell alcoholic beverages?

Held. Yes, "[t]he reasonable efforts and diligence required of plaintiff to bring profits and revenues into existence imposed upon him the duty to apply for a license to sell beer and ale."  The court observed that the contractual language required the Plaintiff to perform all services provided for in the contract, including the sale of alcoholic beverages if and when the ban was lifted.  This is manifest by the by "[t]he intent and object of the parties and the result which they intended to accomplish by its performance."  The court observed "[the Plaintiff's] promise to pay defendant commission a percentage of the gross receipts resulting from the exclusive agency was a promise to use reasonable efforts to bring profits and revenues into existence."  Further, "[i]t was indispensable to defendant commission that plaintiff having the exclusive right to sell should use all diligence to the end that sales be made of the specified items including beer and ale."

Discussion. This case is interesting to read alongside [Cantrell-Waind & Associates, Inc. v. Guillaume Motorsports, Inc.] and compare how the two courts analyze whether or not a condition exists.