Implication Hypo

by Kori Tomlin

LaToya Jackson and the Goldnugget Hotel, Las Vegas, signed a contract whereby Jackson would perform 6 nights a week for the amount of $55,000 + 5% of ticket sales. The Goldnugget assured her orally that the 200 seats would on average be filled (@ $20 a ticket) since her only competition in the Las Vegas area was “Wayne Newton: King of Soul”, “John Denver: Miss American Pie”, and “Roseanne Arnold and Lucianno Pavarotti: In Concert”.

Jackson’s agent figured her percentage of profits from ticket sales to be roughly $23,000, if ticket sales averaged 80% capacity. On the basis of her potential profits due 2 the ticket sales clause, LaToya signed the contract.

After only 2 weeks of performing, however, Wayne Newton injured himself during a concert. While trying to do a pelvic thrust, he tripped and fell into the flaming torch prop used for special effects. He would have to undergo extensive reconstructive plastic surgery for 6 months before returning to the stage. LaToya’s beloved brother Michael’s chimp, Bubbles, began performing in his place Mozart’s most famous compositions (on the piano) nightly at the Las Vegas Hilton. Needless to say, ticket sales at the Goldnugget for LaToya’s performance dropped drastically. The Goldnugget, feeling it was no use to try to compete with Bubbles, reduced its advertising of LaToya’s show to save money lost in ticket sales.

LaToya sues the Goldnugget, arguing the court should imply the terms of 1) best efforts to fill the seats, and 2) good faith in promoting her. Goldnugget argues that no matter how much they advertise, no one will choose to see LaToya over Bubbles, so they are exercising objective good faith in trying not to lose too much money. They also provide evidence to show that they are already near bankruptcy due to poor choices in performers over the past 5 years.

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1) Should the court imply the terms?
Under which of the 3 types of implication?

2) Assuming the court does imply the terms, who should it hold for?


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