Smith v. Price's Creameries

650 P.2d 825 (1982)

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Nature of the Case

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Facts

Smith (P) entered into a written contract with Price's(D) to serve as a wholesale distributor of D's products within a specified area. D's representative indicated so long as they performed satisfactorily, the distributorship would continue indefinitely. D's representatives were aware that P had paid a former distributor $72,637 to purchase the distributorship and equipment and had borrowed $26,000 for working capital and additional assets to perform the duties under the agreement. The agreement between the parties contained a 30-day notice of termination for any reason by either party and a two-year noncompete clause within the distributorship area. Just six months later P received a notice of termination by D. P sued D. P contended the termination provision was unconscionable and void as a matter of law. D got a summary judgment and P appealed.