Business Law and the Regulation of Business 11th Edition by Richard Mann, Barry Roberts

Exercise 27

While under contract to play professional basketball for the Philadelphia 76ers, Billy Cunningham, an outstanding player, negotiated a three-year contract with the Carolina Cougars, another professional basketball team. The contract with the Cougars was to begin at the expiration of the contract with the 76ers. In addition to a signing bonus of $125,000, Cunningham was to receive under the new contract a salary of $100,000 for the first year, $110,000 for the second, and $120,000 for the third. The contract also stated that Cunning ham ''had special, exceptional and unique knowledge, skill and ability as a basketball player'' and that Cunningham therefore agreed the Cougars could enjoin him from playing basketball for any other team for the term of the contract. In addition, the contract contained a clause prohibiting its assignment to another club without Cunningham's consent. In 1971, the ownership of the Cougars changed, and Cunningham's contract was assigned to Munchak Corporation, the new owners, without his consent. When Cunningham refused to play for the Cougars, Munchak Corporation sought to enjoin his playing for any other team. Cunningham asserts that his contract was not assignable. Was the contract assignable? Explain.