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Oral Statements Fail to Convert Trial Franchises to Regular, but Improper Notice Leads to Award of Lost Profits and Lost Future Business Value by Shipman Goodwin LLP - Hartford Office
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April 1, 2011
Previously published on March 2011
In May 2006, there was a dispute involving Sunoco, Lehigh, and the New York Thruway Authority as to which company was going to become the new franchisor for the 13 stations on the Thruway that were no longer going to be ExxonMobil. Lehigh had been awarded the stations, but Sunoco filed a challenge. Because of the uncertainty, Lehigh offered the dealers agreements that were clearly marked “PMPA TRIAL FRANCHISE AGREEMENTS.” The plaintiff dealers made numerous equitable arguments. They alleged that representatives of Lehigh told them that they intended to keep the dealers for “as long as Lehigh [itself] had a contract with the Thruway.” Lehigh also sent the plaintiffs a letter, inviting them to a meeting at which they would be offered “Temporary Agreements” that would be “closely related” to the long-term agreements Lehigh had at the time with ExxonMobil to supply gasoline. At the meeting, Lehigh presented slides, one of which referred to partnering with the dealers “for long term, mutually beneficial success.” At the meeting, the plaintiffs were required to sign the Franchise Agreements, which were entitled “PMPA TRIAL FRANCHISE AGREEMENTS” and provided for a four-month term.
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The views expressed in this document are solely the views of the author and not Martindale-Hubbell. This document is intended for informational purposes only and is not legal advice or a substitute for consultation with a licensed legal professional in a particular case or circumstance. |
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