## Facts

- Members of the band The Ohio Players entered two written agreements on March 24, 1972: a five-year exclusive recording agreement with Westbound Records, Inc., and an exclusive publishing agreement with Bridgeport Music, Inc. tied to the recording agreement’s duration.
- Both contracts contained Michigan choice-of-law provisions.
- Westbound paid a signing advance and, during performance, advanced substantial additional sums for recording sessions and related expenses; the band recorded multiple singles and albums that Westbound released and distributed nationally, including a release that achieved major commercial success.
- Before the five-year term ended, the band repudiated the agreements and signed an exclusive recording contract with Mercury Records.
- The band sued for a declaration that the Westbound and Bridgeport agreements were void and unenforceable; Westbound and Bridgeport counterclaimed and brought Mercury in as a third-party defendant for tortious interference.

## Issues

1. Whether the recording and publishing agreements were void for lack of consideration or lack of mutuality because Westbound was not expressly obligated to produce, release, or promote recordings.
2. Whether implied duties in an exclusive dealing relationship supplied enforceable reciprocal obligations under Michigan law.
3. Whether the agreements were invalid for noncompliance with American Federation of Musicians requirements.
4. Whether the agreements violated Michigan’s statutory prohibition on unreasonable restraints of trade.
5. Whether Illinois courts had personal jurisdiction over Westbound and Bridgeport.

## Decision

- The appellate court vacated the trial court’s summary judgment declaring both agreements void and unenforceable and remanded for further proceedings.
- The court held the agreements were supported by consideration and were not void for lack of mutuality.
- The court held the plaintiffs were estopped from denying enforceability in light of defendants’ reliance and substantial performance.
- The court rejected challenges based on AFM approval and Michigan restraint-of-trade law.
- The court held Illinois courts had personal jurisdiction over the defendants.

## Legal Principles

- A contract is not void for lack of mutuality where consideration exists and the agreement, viewed in context, carries implied obligations of good faith and fair dealing sufficient to prevent an illusory promise.
- In exclusive dealing or exclusive services arrangements, courts may imply reasonable-efforts or good-faith duties to give effect to the parties’ exchange.
- A party that accepts benefits and induces substantial reliance and performance by the other party may be estopped from later asserting the contract is unenforceable to avoid its own obligations.
- A fixed-term exclusivity provision generally is not an unlawful restraint of trade where it operates only during the contract term and does not impose post-termination restrictions.
- Alleged noncompliance with union rules does not void a contract absent an applicable rule requiring approval or otherwise governing the work at issue.

## Conclusion

The appellate court reinstated the recording and publishing agreements as facially enforceable under Michigan law, holding that consideration, implied good-faith duties, and estoppel defeated the band’s lack-of-mutuality and related invalidity theories; it vacated summary judgment and remanded for adjudication of remaining disputes, including alleged breach and interference.


Bonner v. Westbound Records, Inc., 76 Ill. App. 3d 736, 394 N.E.2d 1303 (Ill. App. Ct. 1979)