Perma Life Mufflers, Inc. v. International Parts Corp.
United States Supreme Court
392 U.S. 134 (1968)
Perma Life Mufflers, Inc., and several other muffler dealers (the muffler dealers) (plaintiffs) entered into franchise agreements with Midas, Inc. (Midas) (defendant), that granted the muffler dealers the exclusive right to market and sell Midas mufflers. The franchise agreements included restrictions that prevented the franchisees from buying mufflers from any other manufacturers or selling mufflers outside the locations specified in the agreements. Additionally, the franchisees were required to stock a complete line of Midas products in stores and purchase exhaust-system parts only from Midas. The muffler dealers brought an action against Midas, claiming that the franchise agreements were unlawful restrictions under antitrust law, and sought treble damages under the Clayton Act to compensate for lost profits resulting from the restrictions. The court of appeals determined that the doctrine of unclean hands applied and consequently barred the suit, noting that each of the muffler dealers had been fully aware of the restrictions in the franchise agreements and made considerable profits as franchisees. The muffler dealers appealed on the issue of whether the doctrine of unclean hands barred their claim.
Rule of Law
Holding and Reasoning (Black, J.)
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