Opinion ID: 2972779
Heading Depth: 2
Heading Rank: 3

Heading: Prevented From Performing

Text: 8 Nos. 04-1613/1671 Chase, et al. v. Matsu Mfg., Inc., et al. The parties’ sales commission agreement states that plaintiffs shall be entitled to commissions “as long as Mr. Chase continues to act as the exclusive sales agent for Matsu Manufacturing” and that “if Mr. Chase becomes inactive in the sales management activities surrounding Matsu Manufacturing, his commissions on new business will cease to be paid.” Plaintiffs posit the argument that defendants were precluded from “preventing” Mr. Chase from performing under the agreement by terminating him. They assert it is an implied condition of every contract that one party will not prevent performance by the other party, and that a contracting party who prevents the other party from performing under the contract “cannot urge or avail himself of the nonperformance about which he himself has brought.” See 17A Am. Jur. 2d, Contracts, § 702, 703. Michigan law similarly holds that where conditions exist in a contract, a party to the contract may not avoid liability by relying on the failure of a condition precedent where that party has caused the failure. Lee v. Desenberg, 2 Mich. App. 365, 139 N.W.2d 916 (1966); Ihlenfeldt v. Guastella, 42 Mich. App. 384, 202 N.W.2d 327 (1972). Plaintiffs therefore assert that because the contract did not mention the possibility of involuntary termination of Mr. Chase’s employment and did not have any sales growth or quota provisions, defendants were irrevocably bound by the implied obligation to not prevent plaintiffs from performing under the agreement. Accordingly, plaintiffs claim defendants could not “inactivate” Mr. Chase and then benefit from his failure to be “active” by not paying him commissions. Plaintiffs claim Mr. Chase could only become “inactive” through some means outside defendants’ control, i.e., by his voluntary retirement or his inability to perform because of illness, disability or death. 9 Nos. 04-1613/1671 Chase, et al. v. Matsu Mfg., Inc., et al. As noted previously, because the agreement was terminable at will, either party could terminate it at any time. Further, there is no “prevention doctrine” entitlement where one party to an agreement engages in action that it is legally authorized to take. Shear v. National Rifle Association, 606 F.2d 1251, 1256 (D.C. Cir. 1979); 3A Corbin on Contracts, § 767 n. 97; Restatement, Contracts, § 315. Therefore, the district court properly found that defendants were not precluded from terminating Mr. Chase and thereby discontinuing his right to sales commissions.