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Civil Procedure Keyed to Field
North Supply Co. v. Greater Development and Services Corp.
Citation:
728 F.2d 363 (6th Cir. 1984)Facts
GDSC, operated by Manfred Lehmann, contracted with North Supply to act as its representative in procuring a contract with the Nigerian military for telephonic equipment. The contract provided that GDSC’s commission rights would vest upon contract formation and would survive any subsequent cancellation. After GDSC successfully facilitated negotiations beginning in 1975, Lehmann was arrested and expelled from Nigeria in February 1977 for allegedly engaging in illegal activities and corrupting Nigerian officials. North Supply then negotiated directly with Nigeria and executed a contract exceeding seven million dollars. However, when Nigeria discovered North Supply had operated through Lehmann as an undisclosed principal in violation of Nigerian law, the contract was cancelled, the down-payment was refunded, and penalties were imposed. GDSC subsequently claimed commission payments and initiated arbitration proceedings. North Supply filed suit seeking reformation of its contract with GDSC on three grounds: to eliminate commission obligations when cancellation resulted from Lehmann’s wrongful acts, to reflect that the agreement was a personal services contract requiring Lehmann’s performance, and to provide that commission payments would not be required when the agreement violated local law.
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