Smith and Roberson's Business Law 16th Edition by Richard Mann,Barry Roberts

Exercise 1

In 1952, the estate of George Bernard Shaw granted to Gabriel Pascal Enterprises, Limited, the exclusive rights to produce a musical play and a motion picture based on Shaw's play Pygmalion. The agreement contained a provision terminating the license if Gabriel Pascal Enterprises did not arrange for well-known compos ers, such as Lerner and Loewe, to write the musical and produce it within a specified time. George Pascal, owner of 98 percent of the Gabriel Pascal Enterprise's stock, attempted to meet these requirements but died in July 1954 before negotiations had been completed. InFebruary 1954, however, while the license had two years yet to run, Pascal sent a letter to Kingman, his executivesecretary, granting to her certain percentages of his share of the profits from the expected stage and screen productions of Pygmalion. Subsequently, Pascal's estate arranged for the writing and production of the highly successful My Fair Lady, based on Shaw's Pygmalion. Kingman then sued to enforce Pascal's gift assignment of the future royalties. Decision?