Synergy Inc. makes televisions, which it sells to consumers through a network of independent distributors. Matthew owns one such distributorship in Storyville, Ames. The relationship between Synergy and Matthew is governed by an elaborate contractual agreement, which among other terms provides price schedules for Matthew’s wholesale purchases, sales incentives for dealing lots of Synergy televisions, and a term that allows either party to cancel the agreement without cause by giving ten days’ notice to the other party.

For thirty years, Matthew sells Synergy’s televisions with great success, generating large profits for Synergy and providing a nice lifestyle for Matthew and his family in Storyville. One day, though, the son of Synergy’s CEO decides that he wants to sell Synergy televisions through his new distributorship in Clarksville, Ames (a mere 5 miles from Storyville). Attempting to drive Matthew out of business, Synergy notifies him that it is cancelling the thirty-year old agreement, effective twenty days later. Matthew is heartbroken, seeing his entire livelihood crumble before him.

Eventually, he calms his emotions and speaks to Vince, Matthew’s high school friend and longtime lawyer. Vince, knowing that Matthew’s life has been built on the basis of selling Synergy televisions, tells Matthew that he can use contract law to prevent Synergy from pulling the deal out from under him. Is Vince correct and why ?

Answer rating: 100% (QA)

Matthew has been selling Synergy televisions for 30 years under a contract This contract allows either party to cancel it with a 10day notice Synergy ... View the full answer