CASE 10.1 FEDERAL COURT CASE Contract Marder v. Lopez 450 F.3d 445, Web 2006 U.S

Question

CASE 10.1 FEDERAL COURT CASE Contract Marder v. Lopez

450 F.3d 445, Web 2006 U.S. App. Lexis 14330 (2006)

United States Court of Appeals for the Ninth Circuit

". . . . In hindsight the agreement appears to be unfair to Marder—she only received $2,300 in exchange for a release of all claims relating to a movie that grossed over $150 million . . . ."

—Pregerson, Circuit Judge

Facts

The movie Flashdance tells a story of a woman construction worker who performs at night as an exotic dancer. Her goal is to obtain formal dance training at a university. The movie is based on the life of Maureen Marder, a nightclub dancer. Paramount Pictures Corporation used information from Marder to create the screenplay for the movie. Paramount paid Marder $2,300, and Marder signed a general release contract that provided that Marder "releases and discharges Paramount Picture Corporation of and from each and every claim, demand, debt, liability, cost and expense of any kind or character which have risen or are based in whole or in part on any matters occurring at any time prior to the date of this Release."

Paramount released the movie Flashdance, which grossed more than $150 million in box office receipts and is still shown on television and distributed through DVD rentals. Marder brought a lawsuit in U.S. district court against Paramount, seeking a declaration that she had rights as a co-author of Flashdance and a co-owner with Paramount of the copyright to Flashdance. The district court dismissed Marder's claims against Paramount. Marder appealed.

Issue

Is the general release Marder signed an enforceable contract?

Language of the Court

The Release's language is exceptionally broad and we hold that it is fatal to each of Marder's claims against Paramount. Accordingly, the law imputes to Marder an intention corresponding to the reasonable meaning of her words and acts. Though in hindsight the agreement appears to be unfair to Marder—she only received $2,300 in exchange for a release of all claims relating to a movie that grossed over $150 million—there is simply no evidence that her consent was obtained by fraud, deception, misrepresentation, duress, or undue influence.

Decision

The U.S. court of appeals held that the general release Marder signed was an enforceable contract. The court of appeals affirmed the judgment of the district court that dismissed Marder's complaint against Paramount.

Question:

Is the general release signed by Marder an enforceable contract? Identify each element of a contract and the facts that would support each element.

Explanation / Answer

The general release signed by Marder is an enforceable contract. One of the main elements for contract formation is agreement or mutual assent which requires the parties to agree on the terms of the contract. The agreement is made clear through an offer and an acceptance. The other elements of valid contract include consideration, capacity and legality.

To make an effective offer the offer should have the elements of intention, the terms of the offer should be definite and the offer must be communicated to the offeree. In this case Paramount has made an offer to pay Marder $2,300 to use the information from Marder for the movie and to sign the release agreement with statement which release and discharge Paramount Picture Corporation of and from each and every claim, demand, debt, liability, cost and expense of any kind or character which have risen or are based in whole or in part on any matters occurring at any time prior to the date of Release. The statement makes the intention of the offeror clear and contains definite terms. The offer is communicated to the offeree through the agreement and hence the offer is a valid offer.

Acceptance should be unequivocal and communicated to the offeror. Marder has accepted the offer without any demands which makes it unequivocal and signed the agreement which proves communication of acceptance of the offer.

There is consideration involved as it contains all the elements required to prove consideration which includes legal value, bargained for exchange and adequacy of consideration. Marder has signed the agreement giving up her rights in the movie which prove the elements of legal value for exchange. The amount $2300 received shows the element of bargained for exchange. The adequacy of consideration would be inquired when the element bargained for exchange is lacking.

Both the parties have the capacity to involve in the contract and be liable for duties under the contract as they do not suffer from any incapacity like insane. As the contract was not formed through fraud, undue influence, mistake or under pressure the consent is voluntary and the contract can be enforced by law. As the contract is in writing and signed by the parties it satisfies the element of form also which require certain contracts to be in writing to be enforceable.

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