Sally Beauty Co. v. Nexxus Products Co.

United States Court of Appeals for the Seventh Circuit801 F.2d 1001 (1986)

Facts

In 1979, Best Barber Beauty & Supply Company (Best) entered into a contract with Nexxus Products Co. (Nexxus) (defendant), a California producer of hair care products. The contract provided that Best would promote and be the exclusive distributor of Nexxus products in Texas. The letter agreement between Best and Nexxus was executed following several days of meetings between Nexxus’ vice president and Best’s president. In 1981, Sally Beauty Company (Sally) (plaintiff) purchased Best and merged the businesses. As a result of the merger, Sally received assignment, as successor in interest, of all of Best’s contracts, including the contract with Nexxus. Following the acquisition and merger, Nexxus renounced its agreement with Best, because Sally, as a wholly owned subsidiary of Alberto-Culver which also produced hair care products, was under the control of a direct competitor of Nexxus. Sally sued Nexxus alleging, inter alia, breach of contract. The district court granted Nexxus’ motion for summary judgment finding that the parties based their agreement on “a relationship of personal trust and confidence,” and therefore Best’s performance could not be delegated. Sally appealed.

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