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Contemporary Mission, Inc. v. Famous Music Corp.

United States Court of Appeals for the Second Circuit
557 F.2d 918 (1977)


Contemporary Mission, Inc. (Contemporary) (plaintiff) entered into a contract (the Virgin agreement) with Famous Music Corporation (Famous) (defendant), under which Contemporary provided Famous the exclusive rights to manufacture and sell records of Contemporary’s musical, Virgin, in exchange for royalties on those records. The parties also entered into an agreement (the Crunch agreement) under which Contemporary provided Famous the exclusive right to distribute Contemporary’s records under a newly formed record label named Crunch. Both agreements required Famous to use reasonable efforts to promote and distribute the records. Famous later sold its record division to ABC Records, Inc. (ABC), which refused to have any relationship with Contemporary. Contemporary sued Famous. The jury held that Famous had failed to adequately promote Contemporary’s records and that Famous breached the agreements when it sold the record division to ABC; thus, the jury awarded damages to Contemporary. Famous appealed.

Rule of Law


Holding and Reasoning (Meskill, J.)

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