Supreme Beings Hear Contract Case

The Supreme Court heard arguments Tuesday in one of the rare contract cases that come before it.  True, the issue in Domino’s Pizza, Inc. v. McDonald is actually a civil rights question, but there is a contract involved.  A recap of the briefs in the case is here, and a summary of what happened at oral argument is here.

In the case, Domino’s allegedly breached its contract with a corporate franchisee.  The corporation’s claim against Domino’s apparently was settled in bankruptcy.  But the owner of the franchisee claimed that reason Domino’s breached the contract is because because he was black, and therefore violated his civil rights under section 1981.  He’s therefore claiming a personal cause of action against the franchisor even though he was not individually a party to the contract.

As Ross Runkel of LawMemo notes, the contract issue is pretty plain: one who is not a party to or a third-party beneficiary of a contract can’t claim a breach under it.  The question is whether section 1981 would give a right of action for breach of the contract even where contract law wouldn’t.

[Frank Snyder — Disclosure: My friend and former partner Maureen Mahoney argued the case for Domino’s before the Supreme Court.]