Opinion ID: 752950
Heading Depth: 3
Heading Rank: 2

Heading: Hannex's Attempts to Obtain S & S Japan's Consent to the Assignment

Text: 14 After S & S USA agreed to assign its distribution rights under the 1985 Agreement to Hannex in the June and July 1987 agreements, the Hanneses endeavored to obtain S & S Japan's written consent to the assignment as required by the 1985 Agreement. To this end, Salvo agreed to contact Yamaguchi. Salvo and Bernard each sent telefaxes to Yamaguchi confirming that Jack Hannes had joined the United States organization as a major shareholder, and requesting that Yamaguchi enter into a new distribution agreement naming Hanset Pty, Ltd. and/or its subsidiary Sea & Sea USA as exclusive distributors. In the meantime, Hannex continued to carry on the distribution business under the arrangement discussed above and pursuant to the 1985 Agreement. 15 After receiving the telefaxes from Salvo and Bernard, and after further inquiries from the Hanneses about amending the 1985 Agreement or entering into a new agreement, Yamaguchi instructed his lawyers to review the 1985 Agreement. Yamaguchi asked Martin Hannes to bring him up to date as to the relationship between Hanset and S & S USA and whether it would be virtually Hanset who will represent us in USA Mainland. In response, Martin Hannes called Yamaguchi and explained to him that Hannex would be the distributor and Sea & Sea USA was set up to be Hannex's trading division. He also agreed with Yamaguchi to have Hannex pay the debts owed by S & S USA to S & S Japan. 16 The Hanneses believed, in light of their discussions and course of dealing with Yamaguchi, that Yamaguchi understood that the Sea & Sea USA referred to in the proposed distribution agreement was New S & S USA, Hannex's subsidiary. However, there was some miscommunication. The Japanese Commercial Arbitration Association (JCAA), to which the district court referred certain of Hannex's claims pursuant to the 1985 Agreement, found that Yamaguchi did not share the Hanneses' understanding. This finding is binding on the parties for the purposes of this appeal. 5 17 Throughout the negotiations between Yamaguchi and Martin Hannes concerning the new distribution agreement, Yamaguchi believed that the parties to the new agreement would be Hanset and Salvo's old company, S & S USA, who would act as co-distributors. The draft agreement sent by S & S Japan to Martin Hannes did not list S & S USA as a subsidiary of Hannex or Hanset; rather, it added Hanset to a preamble identical to the one in the 1985 Agreement. The supposedly final version of the agreement, to which Yamaguchi and the Hanneses agreed in principle in May 1988, but which was never executed, did not alter this, nor further illuminate the issue. The ambiguity is heightened by the fact that during the course of the negotiations, Yamaguchi objected to language providing that the agreement could be assigned without consent to any wholly owned subsidiary. 18 In July 1988, after the final version of the proposed distribution agreement had been agreed to by the Hanneses and Yamaguchi, but before it was executed, Yamaguchi learned for the first time that S & S USA was not a party to the agreement and, that, in fact, it no longer existed. Yamaguchi refused to sign the proposed agreement when he met with Jack Hannes in Australia, in late July 1988. Yamaguchi requested a written consent of S & S USA to the termination of the 1985 Agreement.