## Facts

- Monograms Plus, Inc. (MPI) sold David D. Hutton a franchise for $25,000.
- An addendum provided that if Hutton was unable to obtain financing “suitable to him” within 90 days, MPI would refund the $25,000 franchise fee.
- Financing was needed in part to acquire a monogramming machine, which MPI had represented could be leased or purchased on specified terms.
- MPI later offered different machine lease terms that Hutton considered disadvantageous and declined to accept.
- Hutton sought other financing, including a $26,000 loan secured by a mortgage on his home, and stated he could obtain additional funds from his father-in-law if needed.
- Other financing efforts failed when a lessor rejected his application and a bank declined to finance him.
- Hutton invoked the addendum and demanded a refund; MPI refused.
- Hutton sued to recover the fee; MPI counterclaimed for breach of the franchise agreement.

## Issues

1. Whether the addendum’s “financing suitable to him” language in a commercial franchise agreement is governed by a subjective satisfaction standard or an objective reasonable-person standard.
2. Whether, under the proper standard, summary judgment for Hutton was proper given disputes about the availability and suitability of financing.

## Decision

- The appellate court reversed the trial court’s grant of summary judgment for Hutton and remanded.
- The court construed the addendum as a satisfaction-type provision tied to obtaining suitable commercial financing.
- The court held the clause is evaluated under an objective reasonable-person standard, not Hutton’s unreviewable personal judgment.
- Applying the objective standard, the court found genuine issues of material fact regarding whether available financing was “suitable,” making summary judgment improper.

## Legal Principles

- Satisfaction-type clauses are interpreted by:
  - An objective standard when the subject is commercial value, quality, operative fitness, or mechanical utility; dissatisfaction must be reasonable.
  - A subjective standard when the subject is personal taste or judgment, constrained by a good-faith requirement.
- In commercial agreements, language like “suitable” financing generally invites objective review unless the contract clearly grants sole and final discretion to one party.
- When reasonableness under an objective satisfaction clause depends on competing inferences from the evidence, the issue is typically for the factfinder and not appropriate for summary judgment.

## Conclusion

The court held that a franchise addendum allowing a refund if the buyer cannot obtain “financing suitable to him” is judged by an objective reasonable-person standard, and because the record supported competing views on whether suitable financing was available, summary judgment ordering a refund was reversed and the case was remanded.


Hutton v. Monograms Plus, Inc., 604 N.E.2d 200 (Ohio Ct. App. 1992)