Court Opinion

ID: 9497218
Source: CourtListenerOpinion
Date Created: 2023-08-05 16:46:06.367232+00
Date Added: 2024-06-11T17:58:04.053275
License: Public Domain

ROSENN, Circuit Judge,
dissenting.
Boxing is a perennial sport, stretching from the golden days of ancient Greece to present times. The professional life of a boxer, however, is ephemeral and because of the violence of the sport, is limited to a few fleeting years. The possibility of a defeat is always imminent. Thus, a purported contract between a promoter and boxer, which permits the promoter in the event the boxer “should lose any bout” to rescind its obligation to provide any minimum purses, lays all the odds in favor of the promoter.
Boxer Antwun Echols (“Echols”) and his promoter, Banner Promotions, Inc. (“Banner”) dispute the enforceability of the exclusive promotional agreement that they executed in 1999. The purported contract, drafted by Banner and governed by Delaware law, allowed Banner to retain the exclusive promotional rights to secure all professional boxing bouts for at least four *281years, but failed to maintain any price term following a defeat. As drafted, Echols must rely on Banner’s good will for future compensation, hoping that the promoter will renegotiate acceptable new terms on either a bout-by-bout or collective-bout basis. If the new financial terms are unacceptable to the boxer, the purported contract does not allow him to look elsewhere. In my mind, this one-sided instrument is not a legal contract. The instrument is not worthy of judicial enforcement, and I believe that the Delaware Supreme Court would hold it unenforceable. I therefore respectfully dissent.
I.
The majority acknowledges the that Delaware Courts “will not enforce a contract that is indefinite in any of its material and essential provisions.” (Maj. Op. at 278) But, the majority rationalizes that the disputed agreement “does not merely deal with a bout or a series of bouts” but with “the relationship between the two parties, a relationship in which Echols promised to fight exclusively for Banner....” (Maj. Op. at 278-279) Every contract between two parties deals with a relationship, but from the boxer’s corner, the essential ingredients of that relationship are the bout or series of bouts and the obligation of the promoter to provide a purse for the boxer.
A professional fight is no mere exhibition. It is a contest for victory and money. The relationship between a promoter and a boxer is meaningless unless the boxer engages in his craft and receives appropriate compensation. Therefore, the bouts and their purses are not only relevant, but material and essential to the relationship. The details spelled out in Section Six of the disputed agreement with respect to the purses for all bouts reflects how important and material the related parties regarded the purses. The majority’s ipse dixit statement that the purses are not essential completely ignores the language painstakingly set forth in Section Six.
Boxing can be a brutal business, and fighters have precious little time to capitalize on their talents and age. In this case, the price limits set forth in Section Six guaranteed the minimum compensation that Echols could expect each time he stepped into the ring. Therefore, the es-sentiality of the minimum price term to the bargain reached between the parties to this contract cannot be denied.
Neither party disputes that from the time the instrument was executed until Echols’ first boxing loss, the contract guaranteed Echols minimum purses for each fight. However, following Echols’ loss to Bernard Hopkins in 1999, Section Eight of the instrument authorized Banner to either “rescind this Agreement or the purses set forth in paragraph (6) shall be subject to renegotiation.” Banner did not rescind, but elected to renegotiate. The majority interprets this clause as requiring that the price terms thereafter must be renegotiated on a “bout-by-bout” basis. (Maj. Op. at 278) However, the District Court interpreted the contract differently, and found the clause in Section Eight to be “undoubtedly ambiguous.” (D. Ct. Op. at -) According to the District Court, the renegotiation clause may also be interpreted to require that following a loss, the entire minimum price structure must be renegotiated all at once, establishing new price mínimums to govern the agreement. (D. Ct. Op. at-) Under this interpretation, the parties would be able to revitalize the instrument following the defeat by renegotiating a schedule of minimum prices that reflect Echols’ market value as a fighter with one loss.
I recognize that both interpretations of the renegotiation clause present risks to the parties. If price mínimums are to be *282renegotiated all at once, both parties risk that a new agreement will not be reached and the contract, which they otherwise would choose to maintain, would be voided. On the other hand, if prices are left to be renegotiated on a bout-by-bout basis, the boxer risks that he will be forced to accept whatever minimal price the promoter offers, or not fight at all. For the reasons described below, I believe that under the relevant contract law, the former interpretation is the only enforceable and fair option.
Echols essentially argues that he did not bargain for an agreement where following a loss, he is left to either fight for whatever price Banner offers, or not fight at all. I believe that the general rule of contract law, recognized in Delaware and other jurisdictions, that “price is an essential ingredient of every contract ... for the rendering of services” is intended to protect against exactly the situation that Echols now faces. Raisler Sprinkler Co. v. Automatic Sprinkler Co., 171 A. 214, 219 (Del.Super.Ct.1934) (citation omitted). See also Middle States Drywall, Inc. v. DMS Properties-First, Inc., 1996 WL 453418, at *7 (Del.Super. May 28, 1996).
The majority holds that while the purses for the fights are “relevant,” they are not material and essential because the parties could satisfy the terms of the agreement without any bouts occurring. I acknowledge that under the strict terms of the contract, Banner could make three offers per year for boxing matches with de mini-mus purses, Echols could reject all of Banner’s offers, and both parties would be technically compliant with the contract terms. Under this interpretation, a court could determine when a party breaches these terms, thereby providing some level of reasonable certainty in the contract.6 However, I do not believe that this theoretical certainty changes the essential character and terms of this boxing promotion contract, nor does it make the contract enforceable under Delaware law. Even the most basic service contract would be deemed unenforceable if it failed to state a price term, regardless of whether the contract requires the parties to ever actually exercise their ability to purchase or sell the services. The Delaware Superi- or Court reinforced this idea in Raisler Sprinkler, explaining that
[o]ne of the commonest kind of promises too indefinite for legal enforcement is where the promisor retains an unlimited right to decide later the nature or extent of his performance. This unlimited choice in effect destroys the promise and makes it merely illusory. * * * But a promise to give anything whatever which the promisor may choose ... is illusory, for such promises would be satisfied by giving something so infinitely near nothing or by performance so indefinitely postponed as to have no calculable value.
171 A. at 219 (quoting Williston on Contracts, vol. 1 § 43).
The majority portrays Section Eight of the purported agreement to allow for certain events to merely “alter” the price structure in the contract. (Maj. Op. at 278-279) In my view, Section Eight does more than alter the price. It removes the price structure completely, and this renders the contract fatally defective. Under the majority’s holding, Echols’ loss authorizes Banner to make offers for fights at any price, even below market rates, and still remain technically compliant with the *283contract terms.7 I believe this holding “destroys the promise and makes it merely illusory.” Id. In reality, all boxers eventually lose, and some live to fight another day. Although a loss may decrease a boxer’s market value, and some mechanism to adjust price may be required to account for this lack of certainty in the boxing market, I believe that the Delaware Supreme Court would interpret the prior case law in the state to require the maintenance of some minimum price in order to deem the contract enforceable.
II.
In my view, the sparse case law on this topic also supports the premise that boxing promotions contracts must have at least some minimum price term to be enforceable. Both Banner and the majority cite to Don King Prods., Inc. v. Douglas, 742 F.Supp. 741 (S.D.N.Y.1990), to support their position in this case. Yet, Don King supports the opposite conclusion. The original contract in Don King set forth minimum prices for all bouts except title bouts, and the parties later reached a second agreement establishing a $1.3 million purse for a title bout and a $1 minimum purse guarantee for the next three fights, subject to renegotiation upwards in price if the fighter, Douglas, should win the heavyweight title. 742 F.Supp. at 748, n. 5. Therefore, when the court decided the case, there were minimum price guarantees in place, and Douglas was forced to take the position that because his market value as a fighter had risen significantly, the $1,000,000 price minimum was “insufficient to render the contract sufficiently definite for enforcement.” Id. at 761. The court found that the $1,000,000 minimum price was sufficient to bind the parties, and clearly stated that “the minimum price terms, together with DKP’s upfront payment of $25,000 and its commitments to hold a set number of bouts, clearly did provide an expectancy of compensation for Douglas that was sufficiently definite to induce his promise to fight exclusively for DKP.” Id. at 763 (emphasis added). Thus, Don King stands only for the proposition that an exclusive boxing promotion contract with an indefinite price structure, supported at least by minimum price terms, is enforceable.
Furthermore, Don King establishes that minimum price terms are considered part of the bargain that a promoter offers a boxer to induce a promise of exclusivity. By failing to consider the minimum price term as an essential, component of the bargain in the present case, the majority deviates from the rule established in Don King. Under the majority’s holding, a boxer loses the certainty of minimum compensation; the promoter, however, maintains *284exclusive control. Echols maintains a price guarantee as long as he wins, but receives no minimum price guarantee after a loss, when he is most vulnerable. The effect of the majority’s decision is to leave a boxer subject to the whim and mercy of the promoter, once the boxer loses a bout.
Similarly, I believe that the majority’s reliance on the Restatement (Second) of Contracts is equally misplaced. Section 33(2) of the Restatement acknowledges that price terms may be indefinite in certain situations. However, Comment e, relied upon by the majority, deals primarily with contracts for the sale of goods, where price may be determined through market forces. To the extent that Comment e may also “apply to contracts for the rendition of services,” it also states that “one party may be given the power [to set the price] within limits set by agreement or custom or good faith” (emphasis added). In my reading, the contract between Echols and Banner operated in accordance with Comment e before Echols lost a fight, because it did not set specific prices, but allowed Banner to make offers for bouts “within limits,” i.e. above the minimum price levels. After the loss, all limits were removed and no formula was set forth to fix prices for purses. Therefore, the contract no longer complied with Comment e.
Finally, the cases cited by the majority from jurisdictions outside of Delaware, Mantell v. Int’l Plastic Harmonica Corp., 141 N.J. Eq. 379, 55 A.2d 250 (1947), Allied Disposal, Inc. v. Bob’s Home Service, Inc., 595 S.W.2d 417 (Mo.App.1980), and Marcor Mgmt., Inc. v. IWT Corp., 1998 WL 809011 (N.D.N.Y. Nov.17, 1998), are all distinguishable in two key respects. First, none of the products or service contracts in these cases included a defined price limit at the time of contract ratification that was relied upon as an essential term in the original bargain. Thus, it is more reasonable in these cases to conclude that price was a non-essential term. Second, the cases cited by the majority dealt with contracts for new products {Mantell), new technology {Manor), or undefined services {Allied Disposal). Therefore, those contracts all dealt with situations where there was extreme market uncertainty that could not be sufficiently defined at the time of the agreement. The court in Mantell noted that the recent development of contracts with indefinite price terms may be particularly necessary where “the product is new and untried and its potential worth and market value and the cost of manufacture and distribution are unknown quantities.” 141 N.J. Eq. 379, 389, 55 A.2d 250.
Even though individual boxers may be untested, the sport and spectacle of boxing is hardly a new industry with unknown production and distribution costs. If a promoter and a boxer can reasonably agree to minimum purses when the boxer is undefeated, they should be able to agree fairly on them when the boxer has one loss and both retain some bargaining power. The disputed instrument leaves the boxer with no guaranteed purses, no bargaining power, and the promoter in total control of his boxing career for the next several years.
The District Court found the contract unenforceable because the contract is an agreement to negotiate future agreements without specifying its material and essential price terms. (D. Ct. Op. at-) I agree with the District Court.
III.
Therefore, I would hold the contract in this case unenforceable and affirm the judgment of the District Court.

. “The terms of a contract are reasonably certain if they provide a basis for determining the existence of breach and for giving an appropriate remedy.” Restatement (Second) of Contracts § 33(2).

. The majority, at note 2, opines that because the agreement requires Banner to make “bona fide " offers, a de minimus price offer would not be valid under the agreement and may trigger a breach. First, interpreting “bona fide" to mean that a court should imply a reasonableness standard to the price term is inconsistent with the majority's holding that the price term is non-essential. Second, I find no case law, in Delaware or elsewhere, establishing that a "bona fide offer” implies a reasonable price term. Rather, when used to describe an offer, the term “bona fide" refers to an offer intended to produce a legal contract, regardless of whether the price is reasonable. See e.g. Foxboro Co., Inc. v. Soft Systems Engineering, Inc., 894 F.Supp. 48, 51 (D.Mass.1995) (explaining that a bona fide offer refers to an offer made with an intent to bind); In re Formica Corp. Shareholders Litigation, 1989 WL 25812, at *11 (Del.Ch. Mar.22, 1989) (explaining that an offer to purchase a company made for the purpose of stimulating stock activity and raising share price is not a bona fide offer). Under this definition of “bona fide,’’ Banner could make bona fide offers for fights at any price, as long as the offer is intended to bind the parties if accepted.