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Contracts Keyed to Calamari
407 East 61st Garage, Inc. v. Savoy Fifth Avenue Corp.
Facts
The Plaintiff, 407 East 61st St. Garage, Inc. (the "Plaintiff"), entered into an agreement with the Defendant, Savoy Fifth Avenue Corp. (the "Defendant"), on October 1, 1963, to provide garage services for the Savoy Hilton Hotel. The contract was to last for a period of 5 years, and the Plaintiff agreed to pay the Defendant 10% of all "gross transient storage charges to the hotel guests." The agreement was to expire on September 30, 1968. There was no language in the agreement specifying that the Defendant must remain in the hotel business. The only provision concerning termination allowed the Defendant to "terminate the contract should the garage default in the performance of any condition, including the provision of adequate service, and then fail to cure the default within 30 days after receiving written notice." In June 1965, the Defendant's hotel was no longer profitable after incurring substantial financial losses, and subsequently was demolished. The property was sold to another company, and an office building was erected in its place. The Supreme Court treated the contract as a requirements contract, and found that absent any allegations of bad faith, the Defendant was not liable for breach of contract.
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