## Facts

- Leo M. Zinn worked as a personal manager/agent for professional athletes.
- Lemar Parrish was an NFL player for the Cincinnati Bengals.
- In 1970, Parrish signed a one-year professional management agreement with Zinn; Zinn negotiated Parrish’s rookie contract and was paid a 10% commission on salary.
- On April 10, 1971, Parrish signed a new management contract with Zinn that renewed automatically year-to-year unless terminated by 30 days’ written notice.
- The 1971 contract obligated Zinn to negotiate playing contracts and to provide business and investment-related guidance, obtain tax assistance, and use reasonable efforts to secure endorsements and off-season work, in exchange for a 10% commission on playing-contract salary.
- After the 1973 season, Zinn explored interest from the World Football League but ultimately negotiated a four-year Bengals arrangement (approximately $250,000 plus a signing bonus).
- After the Bengals package was completed, Parrish told Zinn he no longer needed his services and refused to pay any commission on the 1974–1977 contracts.
- Zinn sued for unpaid commissions; Parrish asserted statutory invalidity defenses and argued Zinn failed to perform.

## Issues

1. Whether the 1971 management contract was void under § 215 of the Investment Advisers Act of 1940 because Zinn was an unregistered “investment adviser.”
2. Whether Zinn’s failure to obtain a license under the Illinois Private Employment Agency Act rendered the contract unenforceable.
3. Whether Zinn failed to perform his contractual duty to use reasonable efforts to obtain contracts and related opportunities, barring recovery.

## Decision

- The Seventh Circuit reversed the judgment for Parrish and remanded.
- Zinn was not an “investment adviser” within the meaning of the Investment Advisers Act on these facts; the contract was not void under that statute.
- The Illinois Private Employment Agency Act did not bar enforcement of Zinn’s commission claim.
- Zinn satisfied the contract’s reasonable-efforts obligation through consistent, good-faith efforts; lack of results did not establish nonperformance.
- The case was remanded for computation of damages and interest owed to Zinn.

## Legal Principles

- A contract is not void under the Investment Advisers Act merely because it includes incidental business or investment-related guidance; the Act targets those “in the business” of providing securities advice for compensation.
- Ordinary business guidance ancillary to a primary professional service relationship does not, without more, make the provider an “investment adviser” required to register.
- A contractual “reasonable efforts” duty is measured by diligent, good-faith efforts, not by guaranteed success or optimal outcomes in hindsight.
- Where external legal and practical constraints limit alternative opportunities, an agent’s decision to pursue the feasible course (and avoid speculative options) may still satisfy reasonable-efforts performance.

## Conclusion

The court held that Parrish could not avoid paying the agreed commission by characterizing his agent as an unregistered investment adviser or by claiming nonperformance when the record showed good-faith, reasonable efforts; the dispute was sent back to determine the commissions and interest due.


Zinn v. Parrish, 644 F.2d 360 (7th Cir. 1981)