Shubert Theatrical Company v. Rath

Facts

The Shubert Theatrical Company, a New York theatrical producer, entered into a written agreement on July 8, 1919, with George and Richard Rath, acrobatic performers, engaging their exclusive services for one year beginning September 1, 1919, with a guaranteed minimum of 20 weeks employment at $250 per week in New York and $275 per week on the road. The contract included an option for renewal for a second year at increased rates ($300 and $325 respectively) if notice was given before July 1, 1920. The contract contained an express negative covenant prohibiting the defendants from performing for any other management without written consent, and the parties agreed that the defendants’ services were “extraordinary and unique” and could not be replaced. On June 7, 1920, Shubert’s vice president dictated, signed, and caused to be mailed a letter exercising the option, addressed to the defendants at the Detroit Opera House where they were performing. The letter was properly stamped, addressed, and deposited in a United States post office box but was never received by the defendants. Despite the renewal, the defendants refused to perform for Shubert and contracted with a rival manager to appear in a competing production. Evidence at trial established that the defendants’ acrobatic feats were unprecedented, including lifting a full-grown man from a prone position with one hand, described by experienced theatrical managers as “the most marvelous thing that has ever been before” and “absolutely impossible” to replace.