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Contracts Keyed to Calamari
AFLAC, Inc. v. Williams
Facts
The Chairman and Chief Executive Officer ("CEO") of AFLAC, Incorporated ("AFLAC") John Amos, ("Mr. Amos") executed a seven year contract in 1987 with a private attorney, Peter Williams ("Mr. Williams"). The contract provided that Mr. Williams would provide legal advice to AFLAC's company officers on an "as needed" basis. As compensation, Mr. Williams was to be paid a monthly retainer and was able to obtain additional compensation if a project required an "extraordinary" amount of time. The contract was to be automatically renewed in 1995 for another five years unless the agreement was terminated. The contract also included a provision entitling Mr. Williams to damages in "an amount equal to 50 percent of the sums due under the remaining terms, plus renewal of this agreement" if the company ended the contract even for "good cause". Mr. Williams died and AFLAC's new CEO terminated the contract in 1991. AFLAC filed a declaratory judgment action to determine the validity of the contract, and Mr. Williams filed a counterclaim asking for more than $1million dollars in damages for breach of the contract. The trial court granted AFLAC summary judgment, and held that the 1987 agreement was unenforceable. The Court of Appeals disagreed in part, and held that the 1987 contract was enforceable, but that the renewal provision was unenforceable.
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