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Contracts Keyed to Dawson
MindGames, Inc. v. Western Publishing Co.
Citation:
218 F.3d 652.Facts
MindGames is the creator and manufacturer of an adult board game, “Clever Endeavor.” Western is a major marketer of games. MindGames sold 30,000 copies of “Clever Endeavor” in the fall and winter of 1989. In March 1990, MindGames licensed
“Clever Endeavor” to Western. The agreement was in effect until January 1993, with the option to extend the agreement for another year if Western paid MindGames $1.5 million, plus another $300,000 for any subsequent years. Pursuant to the agreement, Western was required to pay MindGames a 15% royalty on all games sold. In the first year, Western paid MindGames $600,000 in royalties before sales fell off. The contract continued until January 1994, despite the fact Western did not pay the additional $900,000 ($1.5 million minus $600,000) required. MindGames then sued Western for breach of contract, requesting damages for the remainder of the contract renewal fee, $900,000; lost royalties,$40 million; plus another $300,000 on the theory that the contract had been renewed for a third year.
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