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Gold Seal Productions v. RKO Radio Pictures

286 P.2d 954, 134 Cal. App. 2d 843 (1955)

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Gold Seal Productions v. RKO Radio Pictures

California Court of Appeal

286 P.2d 954, 134 Cal. App. 2d 843 (1955)

Facts

A movie producer, Jack Skirball, entered into negotiations with RKO Radio Pictures (RKO) (defendant) to produce a movie, Appointment in Samarra. Skirball, president of Gold Seal Productions (plaintiff), was already under contract with RKO for the production Payment on Demand. RKO also began negotiations to have Gregory Peck play the leading role in its new movie and needed a production deal in place by May 16, 1950, to secure a deal with Peck. On May 16, RKO and Golden Seal Productions reached an oral agreement regarding the major terms. The parties agreed that all other details would be the same as provided in their existing contract for Payment on Demand and that they had a deal whether or not Peck performed the lead role. Skirball and RKO’s executive producer, Sid Rogell, shook hands and each stated, “We have a deal.” RKO’s head attorney provided the attorney drafting the written contract with the terms of the oral agreement and instructed that all other terms would appear exactly as in RKO’s last contract with Skirball. On May 24, the parties verbally agreed to a second draft of a writing to memorialize the oral agreement. However, one day later, Peck informed RKO he would not be in the movie. RKO refused to sign the contract until a replacement for Peck was secured. While RKO sought another lead actor, and after internal management changes at RKO, Skirball was notified the movie deal no longer existed. Skirball brought a breach-of-contract suit against RKO. RKO argued there was no agreement to be bound by the contract because the oral agreement covered only major terms and Skirball and Rogell’s verbal agreement was ambiguous. Rogell testified he thought the parties had a deal upon shaking hands. A trial court ruled for Skirball. RKO appealed.

Rule of Law

Issue

Holding and Reasoning (Wood, J.)

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