Black Indus., Inc. v. Bush

110 F. Supp. 801 (D.N.J. 1953)

 

RULE:

Relative values of the consideration in a contract between business men dealing at arm's length without fraud will not affect the validity of the contract. 

FACTS:


Plaintiff manufactured machine parts and purchased subcontract work from other suppliers. Defendant manufacturer agreed with plaintiff to manufacture parts that related to a contract plaintiff had with another company. Plaintiff was responsible for all dealings with the company and was to sell the parts manufactured by defendant to the company at a mark up. Defendant failed to complete the order. Plaintiff filed a breach of contract action. Defendant contended that his price quotes were only tentative and denied a contract existed because the company cancelled. Plaintiff sought damages, and defendant motioned for summary judgment in a breach of contract action. Plaintiff was granted damages.

ISSUE:

Was the contract between the parties void as against public policy? 

ANSWER:

No.

CONCLUSION:

 The consideration stipulated in a contract between business men dealing at arm's length without fraud will not affect the validity of the contract and to declare a contract void as against public policy, the contract must be invalid on the basis of recognized legal principles. Even if it were proved that the plaintiff was to have received a far greater profit than the defendants for a much smaller contribution, the defendant would nevertheless be bound by his agreement by the familiar rule that relative values of the consideration in a contract between business men dealing at arm's length without fraud will not affect the validity of the contract

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