Legal Question in Business Law in California

Contracts

Question:

My wife and I own an events company and our first event is a \''themed music\'' cruise. We got into an agreement (contract) with a local travel agency about 6 months ago (June timefreame) to take the bookings, collect money, etc..for folks that want to book passage on the cruise ship because we are not travel agents. We are just the promoters of the event. The travel agency has been sold in the last few weeks (in California). We HAD a contract with the OLD agency under the old travel agency name and owner and location. Now, the agency has changed owners and location and name. We do not want to stay with the new Travel company. The new company has not asked us to sign a new agreement (contract) with them under the new name, ownership, location. Are we legally bound to stay with them? Thanks/ Brad


Asked on 12/17/08, 7:02 pm

2 Answers from Attorneys
Daniel Bakondi The Law Office of Daniel Bakondi

Re: Contracts

Are they telling you that you have to honor the contract?

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Answered on 12/17/08, 7:25 pm
Bryan Whipple Bryan R. R. Whipple, Attorney at Law

Re: Contracts

Probably. The general rule is that ordinary business contracts can be assigned and delegated - assigned as to rights and delegated as to responsibilities. This rule is necessary in order for mergers and acquisitions to work.

There are exceptions. If you contract with Picasso to paint your portrait, he cannot assign and delegate to his student, or even Miro. If you book the London Philharmonic to perform on your cruise, it cannot assign the contract to the Peoria Symphony. The distinction is that great artists and famous musical groups perform services of such a unique nature that a substitution of someone else does not address your reasonable expectations.

I doubt very strongly that this rule of unique services applies to a travel agency change of ownership. Possibly you could argue that there was something highly special about the old agency, and possibly the new agency will join with you in a voluntary rescission of the contract - but in court I'd say you would not get relief.

There are some technical requirements for an assignment, including notice to you, but you seem to have been notified.

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Answered on 12/17/08, 10:15 pm


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