Arbitron, Inc. v. Tralyn Broadcasting, Inc. Case Brief
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Case Brief Summary & Legal Analysis
tl;dr: A data licensor sued a licensee for breach after unilaterally raising a license fee pursuant to a contract clause. The court held that a clause granting one party the unilateral right to determine a future price is enforceable and not an invalid “agreement to agree.”
Legal Significance: Under New York law, a contract is not an unenforceable “agreement to agree” if it unambiguously grants one party the unilateral authority to determine a material term, like price, in the future, distinguishing it from contracts that require future mutual negotiation.
Case Facts & Court Holding
Key Facts & Case Background
Arbitron, Inc. licensed its copyrighted radio listener data to Tralyn Broadcasting, Inc. for a single station at a fixed monthly rate. The license agreement contained an “escalation clause” stating that if Tralyn or its successor acquired additional radio stations, “Arbitron may redetermine its Gross Annual Rate for the Data.” The clause did not specify a formula or methodology for this redetermination. Subsequently, Tralyn was acquired by JMD, Inc., an entity that controlled several other stations in the same market. The new entity, JMD, did not notify Arbitron of the change in control as required by the contract. Upon discovering the acquisition, Arbitron exercised its right under the escalation clause, unilaterally calculating and invoicing a new, higher monthly fee based on the increased number of stations. JMD refused to pay the increased rate, arguing the clause was unenforceably vague. Arbitron sued for breach of contract. The district court granted summary judgment to JMD, finding the clause void for indefiniteness.
Court Holding & Legal Precedent
Issue: Under New York contract law, is a clause that grants one party the unilateral right to “redetermine” a price upon the occurrence of a specified future event unenforceable for indefiniteness?
No. The court held that the escalation clause was enforceable because it Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in
IRAC Legal Analysis
About IRAC analysis
IRAC (Issue, Rule, Analysis, Conclusion) is the structure professors expect in exam answers. Each LSD.Law brief states the issue, the governing rule with citations, the court's application of that rule, and the conclusion - the same reasoning pattern you will use on exams and in practice.
Legal Issue
Under New York contract law, is a clause that grants one party the unilateral right to “redetermine” a price upon the occurrence of a specified future event unenforceable for indefiniteness?
Conclusion
This case clarifies that under New York law, definiteness can be achieved Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris ni
Legal Rule
A contract term is not unenforceably indefinite if the parties' intent to Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu
Legal Analysis
The Second Circuit, applying New York law, reversed the district court's finding Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum. Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum. Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum. Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tem
Flash-to-Full Case Opinions
Flash Summary
- Under New York law, a contract clause is enforceable if it