## Facts

- Travellers International, A.G. (Travellers), a tour operator, and Trans World Airlines, Inc. (TWA), an international airline, worked together for roughly 15 years on European vacation packages sold as “Getaway Tours.”
- Under the parties’ arrangement, Travellers designed the tours, handled the non-air “land” component, created marketing brochures, and operated the tours; TWA sold the tours and provided transatlantic air transportation.
- The tour price combined airfare plus the land-tour price; TWA retained the airfare revenue and also received a stated percentage of the tours’ retail price.
- On November 26, 1984, the parties entered a written contract governing tour seasons beginning in 1986 and continuing through the end of 1991.
- The 1984 contract required Travellers to produce at least 100,000 brochures each year for TWA to use in selling the tours, consistent with the brochure-based sales method used in prior seasons.
- TWA changed ownership in 1985 and Travellers changed ownership in 1986; after these changes, the business relationship deteriorated.
- TWA sought different economic terms and acted to reduce the number and price of brochures it took from Travellers.
- Approximately three months after these changes, TWA attempted to terminate the 1984 contract.
- Travellers (and Windsor, Inc., an affiliated plaintiff) sued seeking a permanent injunction compelling TWA’s continued performance of the 1984 contract through its stated term.
- At trial, Travellers presented evidence that about 90–95% of its business came from the TWA contract.
- The parties introduced evidence bearing on whether performance of the contract would be economically feasible; the court credited evidence that continued performance would be profitable for TWA.
- The action was filed in Missouri state court, removed to federal court, transferred to the Southern District of New York, and preceded by a preliminary injunction (issued after hearings) that restrained termination pending a final decision.
- The district court then held a bench trial to decide whether to issue a permanent injunction.

## Issues

1. Did TWA have a contractual or legal basis to terminate the 1984 Getaway Tours contract before its expiration?
2. If TWA’s termination was not justified, were Travellers and Windsor entitled to permanent injunctive relief requiring specific performance, rather than being limited to money damages?
3. Did the equitable factors for a permanent injunction—irreparable harm, inadequacy of legal remedies, and balance of hardships—support ordering continued performance through the contract term?

## Decision

- The court granted the plaintiffs’ request for a permanent injunction.
- The court concluded TWA was not entitled to terminate the 1984 contract in the manner attempted and that plaintiffs were entitled to enforcement of the contract’s continuing obligations.
- The court ordered TWA to continue performing the contract according to its terms and the parties’ established practices, including the brochure-based sales method that was central to the program.
- The court found plaintiffs faced irreparable harm if the contract ended, given Travellers’ heavy dependence on the TWA relationship and the difficulty of measuring losses such as disruption of business operations and goodwill.
- The court concluded that money damages would not be an adequate substitute for the ongoing contractual relationship during the remaining term.
- The court found the balance of hardships favored plaintiffs, noting that continued performance was not shown to be commercially unworkable for TWA and was supported by evidence that the contract could be profitable for TWA.

## Legal Principles

- A permanent injunction in a contract dispute requires actual success on the merits and a showing that legal relief is inadequate and irreparable harm will occur without equitable relief.
- Specific performance may be ordered for an ongoing commercial agreement when the injured party cannot readily obtain a substitute arrangement and future losses are difficult to quantify with reasonable precision.
- In evaluating irreparable harm, courts consider whether termination would threaten the continued viability of the non-breaching party’s business and cause losses (such as goodwill and business continuity) that are not easily reducible to a damages award.
- Courts may consider the parties’ course of dealing to determine what performance the contract contemplates, especially where a long-running joint business depends on coordinated actions (such as brochure-based sales).
- The balance of hardships and feasibility of enforcement matter: a court is more likely to order continued performance where doing so does not impose an unreasonable burden on the breaching party and the agreement remains economically workable.

## Conclusion

The Southern District of New York held that TWA’s attempted termination of the parties’ long-term Getaway Tours contract was not justified and that plaintiffs were entitled to a permanent injunction requiring continued performance through the contract term, because termination threatened severe, hard-to-measure harm to a business largely dependent on the relationship and damages alone were not an adequate remedy.


Travellers International, AG v. Trans World Airlines, Inc., 722 F.Supp. 1087 (1989)