Bloor v. Falstaff Brewing Corp.

Facts

P. Ballantine & Sons (hereinafter “Ballantine”) was a family-owned business that produced low-priced beers. Ballantine’s sales eventually declined, and it engaged in promotional practices (including “some of dubious legality”) to increase sales. Falstaff Brewing Corporation (hereinafter “Falstaff”) (defendant) later bought Ballantine’s brewing labels, trademarks, accounts receivables, distribution systems, and other property apart from the brewery. The parties’ contract contained a best-efforts clause that stated Falstaff would “use its best efforts to promote and maintain a high volume of sales” for Ballantine. If Falstaff discontinued distribution of beer under the brand name “Ballantine,” then it would trigger the contract’s liquidated-damages clause. Falstaff discontinued various illegal practices that had been used in promoting Ballantine products. The volume of Ballantine’s sales declined while Falstaff made a financial recovery. James Bloor (plaintiff), trustee of Ballantine, sued Falstaff, claiming that Falstaff had breached the best-efforts clause in their contract.