Law School Case Brief
X.L.O. Concrete Corp. v. Rivergate Corp. - 83 N.Y.2d 513, 611 N.Y.S.2d 786, 634 N.E.2d 158 (1994)
The Donnelly Act, N.Y. Gen. Bus. Law §§ 340 et seq., having been modeled on the Federal Sherman Act of 1890, should generally be construed in light of Federal precedent and given a different interpretation only where State policy, differences in the statutory language or the legislative history justify such a result.
Plaintiff X.L.O. Concrete Corp. (XLO), a subcontractor, completed the work on the contract, but defendant Rivergate Corporation (Rivergate), the contractor, refused to pay, precipitating the instant suit. In its answer, Rivergate alleged an affirmative defense and counterclaim urging dismissal of the complaint on the basis that the contract was an integral element of an antitrust conspiracy in violation of the Donnelly Act, N.Y. Gen. Bus. Law §§ 340 et seq.
Did interposition of an antitrust illegality defense under the Donnelly Act prevent enforcement of the contract between the parties as a matter of law?
The court held that the contract was legal on its face and did not contemplate or require conduct in violation of the antitrust laws in its performance. The mere fact that the contract was related to an antitrust conspiracy did not automatically render it unenforceable. The critical question was whether the contract was so integrally related to the agreement in restraint of competition that its enforcement would have resulted in compelling performance of the precise conduct made unlawful by the antitrust laws. Whether the contract was an indivisible, effectuating component of an illegal arrangement that would have been consummated by granting the judgment sought in the instant action presented factual questions that requires further development at trial and precluded summary judgment.
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