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Steak House, Inc. v. Barnett - 65 So. 2d 736 (Fla. 1953)

Rule:

A covenant is dependent where it goes to the whole consideration of the contract; where it is such an essential part of the bargain that the failure of it must be considered as destroying the entire contract; or where it is such an indispensable part of what both parties intended that the contract would not have been made with the covenant omitted. A breach of such a covenant amounts to a breach of the entire contract; it gives to the injured party the right to sue at law for damages, or courts of equity may grant rescission in such instances if the remedy at law will not be full and adequate.

Facts:

The plaintiff was the lessee of certain premises on which were located businesses known as the Singapore Lounge and the Fisherman's Wharf. The premises were being managed and operated by the defendant under an agreement between the plaintiff and the defendant. The entered into another agreement whereby the defendant promised to pay the plaintiff $18,000. Eventually, plaintiff instituted an action for rescission of the agreement averring performance his part and the failure and refusal of the assignee to pay the indebtedness of the assignor as agreed. The complaint also alleged that the promise made by the assignee to pay the indebtedness "was false and fraudulent and was known to the defendant to be false and fraudulent at the time it was made; that, in truth and in fact, at the time defendant made and entered into the said agreement he did not intend to assume and pay the indebtedness of the plaintiff and that defendant made the said false and fraudulent statements and representations to plaintiff to induce plaintiff to execute the agreement." The trial court granted the defendant's motion to dismiss appellant's complaint. Appellant sought review. 

Issue:

Was it proper to grant the motion to dismiss?

Answer:

No.

Conclusion:

The court reversed the trial court's judgment and remanded. The court held that plaintiff's complaint was not wholly without equity. The court held that although the covenant alleged to have been breached by the defendant did not go to the entire consideration of the contract, it was such that the plaintiff would not have entered into the contract with that provision omitted. The court held that the plaintiff should have been given the opportunity to prove the issues alleged in its complaint.

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