In 1992, White and J.M. Brown Amusement Co. entered into a contract giving Brown exclusive rights to

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In 1992, White and J.M. Brown Amusement Co. entered into a contract giving Brown exclusive rights to place “certain coin-operated amusement machines” in 13 of White’s stores, all in Oconee and Anderson counties in South Carolina. The contract was for a term of 15 years. Under the contract, White agreed “not to allow other machines on the premises without the express written consent of [Brown].” Brown placed the machines in White’s stores as the contract provided. In 1993, the state legislature enacted a local option law as part of the Video Game Machines Act, permitting counties to hold an individual referendum to determine whether cash payouts for video gaming should remain legal. As a result of local referenda held in November 1994, 12 counties, including Oconee and Anderson, voted to ban cash payouts. The South Carolina Department of Revenue revoked the licenses required to operate the machines Brown had placed in White’s stores, effective July 1, 1995, as required by the act. Consequently, Brown removed the video poker machines from White’s stores. Brown did not replace the machines with any other coin-operated amusement machines. In November 1996, the South Carolina Supreme Court struck down the local option law contained in the act as unconstitutional. Given this Court’s ruling, Brown planned to return the video poker machines to White’s stores, but White informed Brown that the contract was no longer valid. White then filed suit seeking to have the contract declared void and unenforceable so that he would be free to sign a contract with another provider of legal video and amusement machines. Approximately one month after filing suit, White entered into an agreement with Hughes Entertainment, Inc. giving Hughes exclusive rights to place “all video game terminals and all coin operated music and amusement machines” in 12 of the same stores listed in the Brown contract. Was White’s duty to perform the contract with Brown excused?

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Business Law The Ethical Global and E-Commerce Environment

ISBN: 978-1259917110

17th edition

Authors: Arlen Langvardt, A. James Barnes, Jamie Darin Prenkert, Martin A. McCrory

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