ContractsProf Blog

Editor: Myanna Dellinger
University of South Dakota School of Law

Wednesday, July 18, 2018

Termination for any reason at all means that you can terminate for, well, any reason at all

A recent decision out of Ohio, Whitt v. The Vindicator Printing Company, Case No. 15 MA 0168, discusses the limits of the implied covenant of good faith and fair dealing. In the case, the contract contained a provision permitting termination of the contract for "malfeasance . . . , or at the will of either party for any reason or no reason" upon thirty days written notice. Vindicator terminated the contract with Whitt after an altercation between Whitt and a temp employee working for Vindicator. Whitt sued for, among other things, breach of contract, complaining that Vindictor had wrongfully terminated the contract only seven months into its three-year term. Whitt alleged that Vindictor violated the implied covenant of good faith and fair dealing because it terminated the contract after Whitt was a victim of criminal assault at the hands of Vindicator's employee. 

The court noted, though, that the requirement of good faith should not give a court the ability to second-guess decisions made within the context of the contract. The termination provision of the contract did not require just cause, which was what Whitt was trying to read in. Rather, the contract permitted Vindicator to terminate it for no reason whatsoever, so the exact circumstances of the termination did not matter. 

I think many people assume that contracts provide a level of reliability and predictability that doesn't exist if those contracts permit termination for any reason, or for no reason. I think Whitt assumed that this contract would stay in effect unless he did something terrible, but that's not how the termination clause was worded. 

(h/t to D. C. Toedt for the free link!)

https://lawprofessors.typepad.com/contractsprof_blog/2018/07/termination-for-any-reason-at-all-means-that-you-can-terminate-for-well-any-reason-at-all.html

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Comments

Nonpaywalled: https://scholar.google.com/scholar_case?case=2317233212559579181

Google Scholar has good, free, search capabilities — you can narrow your search by federal- or state court, and even down to which court(s) within one or more states. https://scholar.google.com/ (I have no connection to Google.)

Posted by: D. C. Toedt | Jul 18, 2018 11:33:54 PM

Thank you!

Posted by: Stacey | Aug 1, 2018 10:57:44 AM

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