Mandel v. Liebman

In 1946 an actor, Max Liebman (defendant), engaged the services of a personal representative, Louis Mandel (plaintiff), who specialized in managing entertainers. Mandel was also an attorney. Under the five-year contract as Liebman’s manager, Mandel was required to help Liebman advance his career, advise Liebman on employment offers, and execute contracts. Because managers typically serve more than one client, the contract contained language indicating that Mandel could spend as much time in representing Liebman as necessary according to Mandel’s own judgment. Liebman agreed to pay Mandel 10 percent of his earnings during the contract period. This compensation requirement included payment for engagements that started during the five-year period of the contract and were extended or were renewed after the contract period was over. In 1947 Mandel and Liebman modified the contract to permit Liebman not to pay Mandel for his services for any year in which Leibman’s income was less than $20,000. Later, Mandel sued Liebman for compensation Liebman owed Mandel from 1948 to 1949. A trial court dismissed Mandel’s lawsuit and ruled that Mandel’s employment to serve as Leibman’s personal manager was really a retainer agreement between a lawyer and a client. Under this view of the contract, the court reasoned that Liebman could discharge Mandel, his attorney, at any time and pay only such compensation as was required under quantum meruit. An appellate court affirmed the trial court but for other reasons. The appellate court ruled that the original contract, with the 1947 modification, was unconscionable and against public policy and, therefore, void. The appellate court determined that the contract did not really require Mandel to perform, yet it required Liebman to compensate Mandel forever. Mandel appealed.