South-Western Legal Studies in Business

Variable Payment Term Does Not Make Contract Unenforceable
Description Appeals court held that a contract between a boxer and a boxing promoter, who would pay the boxer variable rates depending on the kind of fight he was in, was not unenforceable for indefiniteness.
Topic Contracts
Key Words Agreement; Enforceability; Definite Terms
C A S E   S U M M A R Y
Facts Pelullo owns Banner Productions. It manages boxers and promotes fights. Echols, a boxer, signed an agreement with Banner that paid him a $30,000 bonus and gave Banner "exclusive right to secure all professional boxing bouts." The contract spelled out payments to Echols depending on the kind of fights. It stated that if Echols lost a fight, Banner could then lower payments the payments made to Echols. After Echols lost a championship bout, Banner said it would then negotiate terms on a bout-by-bout basis. Echols sued, contending that either the agreement was unenforceable for indefiniteness or that he was due the original, higher payments for fights. The district court found the contract unenforceable for indefiniteness, holding that it failed to contain a price term. Banner appealed.

Reversed. Under Delaware law, a promotional agreement under which Banner was to negotiate payments to Echols on a fight-by-fight basis over four years was not unenforceable as indefinite with respect to the terms for Echols' compensation. The agreement was not a contract to enter into a future contract, but rather, it contained all material and essential terms required given that the subject matter of the agreement was a relationship in which Echols promised to fight exclusively for Banner, and Banner promised to arrange at least three bouts per year for Echols.

Citation Echols v. Pelullo, 377 F.3d 272 (3rd Cir., 2004)

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