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Contracts Keyed to Kuney
Zell v. American Seating Co.
Citation:138 F.2d 641 (1943).
On October 17, 1941, plaintiff offered via letter to try to procure national defense or war contracts for the defendant company at a rate of $1,000 per month for a three month period. If plaintiff was successful in procuring the contracts, he also requested to be paid between 3-8% of the “purchase price” on the contracts. On October 31, 1941, plaintiff and defendant’s president met and reached an oral agreement with substantially the same terms set forth in the letter with the exact percentage on the commission to be determined at later date. The parties also executed a written instrument to this effect, but omitted the provision regarding the commission and stating instead that “the company may, if it desires, pay [plaintiff] something in the nature of a bonus.” The parties, however, orally agreed that their oral agreement regarding commissions was the actual contract and the writing deliberately omitted such out of fear of “criticism for contingent fee contracts” possibly due to Congress’ adverse comments regarding contingency fees in connection with war contracts. Thereafter, plaintiff procured war contracts for an aggregate purchase price of $5,950,000 for defendant. However, defendant refused to pay the commissions on the amount and only paid him the base rate.
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