Summary of Eckles v. Sharman
548 F.2d 905
United States Court of Appeals, 10th Circuit 1977
Procedural History: Eckles sued Sharman under breach of contract and another party under inducement to breach contract when Sharman took a position with the ABA and resigned his position with the Utah Stars; Judgment was enetered on a jury verdict for $250000 against the coach and $175000 against the inducing owner. Judge Ritter denied a defense motion to dismiss; Judge Ritter directed a verdict against Sharman on the question of liability and the jury decided damages; Sharman appealed the case.
Facts: Sharman entered into an agreement for 5 years to coach a Los Angeles based basketball team; Part of the employment contract stated that Sharman was entitled to pension benefits to be specified at a later time; Sharman coached the LA team for two years without any pension benefits; The team was then sold and re-located to Utah. Once in Utah, Sharman has numerous communications with Bill Daniels, owner, regarding his pension benefits. In June, 1971, Sharman resigned as coach of the Utah Stars and signed a contract to coach the LA Lakers.
Issue: The question is not whether good faith negotiations had taken place but whether the option and pension were so essential to the contract that failure to agree on the pertinent terms made the contract unenforceable.
Holding: A directed verdict means that all the evidence points in only one direction, without ambiguity; in this case, whether the pension provision was essential or not for the contract is a matter of fact to be decided; trial court erred in granting a directed verdict; The court’s error also requires the question as to California Sports’s inducement to breach be reversed.
Reason: “On the record presented it may not be said, as a matter of law, that the option and pension clauses were unessential and hence severable. Neither can it be said, as a matter of law, that without the resolution of the controversy over those clauses Sharman agreed to the assignment of the contract to the owners of the Utah Stars. The pertinent intent questions required factual determination by the jury under property instructions.”
The case based around the “essential nature” of the pension provision. Essentiality was establihed in Texaco, Inc v Penzoil, Co.
Notes: When determining if a provision in a contract agreement is “essential”, essentiality depends on the intent of the parties.