finding it reasonable for plaintiff to believe that bank officer had authority to bind bank to a particular service agreement based in part on the facts that (a) the officer was the bank’s senior vice president and (b) the officer had previously negotiated agreements with the plaintiff on behalf of the bank
How later courts described this case
- finding it reasonable for plaintiff to believe that bank officer had authority to bind bank to a particular service agreement based in part on the facts that (a) the officer was the bank’s senior vice president and (b) the officer had previously negotiated agreements with the plaintiff on behalf of the bank
- holding “best efforts” is a standard in and of itself and is therefore enforceable, noting that even where “best efforts” is not defined it is “a standard that has diligence as its essence” and a term that “takes its meaning from the circumstances”
- holding © 2015 Thomson Reuters. No claim to original U.S. Government Works. 21 DaimlerChrysler Motors Co., LLC v. Manuel, 362 S.W.3d 160 (2012
- finding that a business entity’s statements about a “long term mutually beneficial relationship” had “‘no concrete terms, and [were] general statements of expectation or opinion”
Written by the judges who cited it.
The opinion
THEODORE G. BLOOM, Judge,
Retired, Specially Assigned, concurring.
I concur in the opinion written for the Court by Judge Adkins, but for a different reason than that set forth in that opinion with respect to reversal of the verdict and judgment in favor of appellee on its claim for fraud.
In its brief, appellee referred to evidence that indicated that the phrase “best efforts” that was inserted in the written contract between the parties had a special meaning. Further references to that evidence were made during oral argument. I agree with the majority opinion that the “best efforts” phrase (absent some special meaning) was too ambiguous, too general, to serve as a basis for a claim of fraudulent inducement to enter into a contract that appellant never had any intention to perform. Appellee refers however, to testimony by Mr. Steele that, in negotiations between him and Parkes Dibble, one of appellant’s vice-presidents, the term “best efforts” had been given a particular meaning: Dibble told him that “they could send all the transactions he could and that [Steele] could handle.” Mr. Steele understood that “best efforts” meant that appellee would receive approximately 85% to 90% of appellant’s transactions, provided appellee had the capacity to handle that many transactions.
There was also testimony to the effect that, when Senior Vice-president Bill Clewis succeeded Dibble as appellant’s agent in negotiating the terms of the contract between the parties, he told Mr. Steele “not to worry. Nothing’s changed,” *192 and that “[Clewis] was aware of what [Steele] had discussed with Parkes [Dibble] and we are the company.” That evidence, coupled with testimony by Clewis that, under no circumstances would appellee receive more than 50% of the transactions that the bank would refer for processing, could, I believe, have supported a finding that appellee had been induced to enter into the Service Agreement by appellant’s fraudulent representation that appellant would refer to appel-lee all of the transactions covered by the agreement that appellant had and that appellee could handle.
That theory of “fraudulent inducement,” based on a special agreed meaning of best efforts, however, was never presented to the jury for its consideration. With respect to the “best efforts” provision in the Service Agreement, the trial judge instructed the jury as follows:
In this contract it calls for best efforts. Best efforts clauses impose an obligation to act with good faith in light of one’s own capabilities.
Good faith is defined as follows: good faith is an intangible and abstract quality with no technical meaning or statutory definition, and it encompasses, among other things, an honest belief the absence of design to defraud or to seek unconscionable advantage and an individual’s personal good faith is concept of his own mind and inner spirit. Honesty of intention and freedom from knowledge of circumstances which ought to put the holder upon inquiry.
In common usage this term is ordinarily used to describe that state of mind denoting honesty of purpose, freedom from intention to defraud, and generally speaking means being faithful to one’s duty or obligation.
That instruction is consistent with the majority opinion’s thorough discussion of the meanings that courts and writers on the subject have ascribed to the phrase “best efforts” in contacts. I agree with the conclusion in the majority opinion that the “best efforts” phrase in the Service Agreement between the parties, and as defined by the court in its instructions to the jury, was too ambiguous to support appel- *193 lee’s claim of fraud in the inducement, although it is sufficient to support the breach of contract verdict.
The court did instruct the jury that the plaintiffs claim that it was promised a long-term relationship “is relevant only to the fraud in the inducement claim,” and that appellee’s attorney did stress that point in his argument to the jury. I agree with the majority opinion, however, in its conclusion that, in light of the short-term provisions in the Service Agreement, appellee could not have relied on the “long-term relationship” assurances as a basis for its fraud claim.