Macy’s vs Martha Stewart Living Omnimedia

Case summary :

JC Penney bought a minority stake in Martha Stewart Living Omnimedia for 38.5 million in December
2011.

As a part of its deal , JC Penney planned to sell Martha Stewart's bed, bath and kitchen products in
stores .

But Macy’s claimed that Martha Stewart had already granted it the exclusive right to make and sell
certain products under a 2006 agreement. Macy’s filed an injunction in the NY State Supreme Court .

The case was fought for 5 years . In February 2017 , an out-of-court settlement was reached and Macy’s
was entitled to damages from JC Penny and Martha Stewart Living Omnimedia . The case was then
closed in 2017 in the NY State Supreme Court .

Case analysis according to the 9 elements of a valid contract :

1) Offer and Acceptance: Yes . Both the individual parties made offers to Martha Stewart and
both were accepted .
2) Intention to create a legal relationship : Yes . Both the parties wanted to create a legal contract .
3) Consensus-ad-idem : Present as both the parties in both the contracts understood the terms
clearly and agreed to them .
4) Capacity to Contract : Yes . All three parties had the capacity to contract .
5) Free Consent : yes . There was free consent as none of the parties were coerced into the
contract .
6) Consideration : Consideration is basically the benefit each party expects to get from the deal .In
other words , it’s a promise to either do something or to abstain from doing something . So , in
Martha Stewarts contract with Macy’s , it was agreed upon that the right to sell Martha Stewart
products was exclusively with Macy’s and they were to abstain from allowing any other brand
from doing the same . However they allowed JC Penny to do so breaking consideration and
therefore violating the contract .
7) Legality : Yes. Both contracts were legal .
8) Possibility of performance : Yes . All parties were capable of performing .
9) Writing and Registration : Yes . Writing and registration was done .