Essay On Zapatha Vs Dairy Mart

First, Zapatha (plaintiff) was a former and manager for Dairy Mart (defendant). Zapatha worked there for almost 20 years, then he was fired, in May 1973. Zapatha wanted to own a business. He spoke to Dairy Mart about a franchise. On November 8, 1973, Dairy Mart accepted Zapatha's franchise idea and gave him a franchise agreement. There was a clause in the agreement that either party could terminated after 12 months, if they give 90 days written notice. The agreement stipulated that if Dairy Mart terminated without cause, they would have to purchase Zapatha’s remaining inventory at 80% market value. Dairy Mart told Zapatha to read the agreement and have it looked over by an attorney. Zapatha did not seek counsel, and signed the franchise agreement

The trial court held for Zapatha. Dairy mart appealed. In Zapatha v Dairy Mart, 381 Mass. 284; N.E. 2d. 1370 there are two issues at hand. 1) Does the unconscionability of an agreement depend on whether at the time of execution the contract provision at issue could result in unfair surprise and was oppressive to the allegedly disadvantaged party; and 2) Whether a merchant seeking to terminate a business agreement must act in good faith by practicing honesty in fact and observing reasonable commercial standards of fair dealing in that trade. The finding was the action by Dairy Mart was not unconscionable nor did Dairy Mary act improper or in bad faith. It would only be unconscionable if it resulted in being an unfair surprise or was oppressive at the time of the agreement. In addition, a merchant must act in good faith when terminating a business agreement. Basically, was the person honest? If the party terminating acted without cause, courts could stop the termination if it was done in bad faith. The termination clause that Dairy Mart and Zapatha agreed to had no possability for unfair surprise to