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Postal Instant Press v. Sealy

California Court of Appeal
51 Cal. Rptr. 2d 365 (1996)


Facts

Postal Instant Press, Inc. (Postal) (plaintiff) signed a franchise agreement with Sue and Steve Sealy (defendants), permitting the Sealys to operate a local Postal store in exchange for a royalty fee of 6 percent of gross revenue and an advertising fee of 1 percent of gross revenue. The contract required the Sealys to pay the fees monthly. The Sealys fell behind on their payments, and Postal terminated the franchise agreement. Postal sued the Sealys for not only the past-due payments, but also future payments that would have been due under the remainder of the 20-year franchise agreement. The trial court ruled in favor of Postal, including the requested damages, estimating the Sealys’ gross revenues for the remainder of the agreement term. The Sealys appealed, arguing that they should not have been liable for future royalties that would have come due had Postal not terminated the franchise agreement.

Rule of Law

Issue

Holding and Reasoning (Johnson, J.)

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