''Ellefson v. Megadeth, Inc.'' 2005 WL 82022 (
S.D.N.Y.
The United States District Court for the Southern District of New York (in case citations, S.D.N.Y.) is a federal trial court whose geographic jurisdiction encompasses eight counties of the State of New York. Two of these are in New York Cit ...
2005) was a
contract
A contract is an agreement that specifies certain legally enforceable rights and obligations pertaining to two or more parties. A contract typically involves consent to transfer of goods, services, money, or promise to transfer any of thos ...
s
case
Case or CASE may refer to:
Instances
* Instantiation (disambiguation), a realization of a concept, theme, or design
* Special case, an instance that differs in a certain way from others of the type
Containers
* Case (goods), a package of relate ...
tried in the
in 2005, in which the court determine to enforce a settlement agreement page signed and sent by fax, as an acceptance of a contract or as a counter offer.
Background
David Ellefson
David Ellefson is an American musician, best known for his long tenure as the bassist and backing vocalist for thrash metal band Megadeth across two stints.
Ellefson initially became an accomplished bassist and honed his songwriting skills whi ...
and
David Mustaine are both original members of the heavy metal band
Megadeth
Megadeth is an American thrash metal band formed in Los Angeles in 1983 by vocalist and guitarist Dave Mustaine. Known for their technically complex guitar work and musicianship, Megadeth is one of the "big four" of American thrash metal—alo ...
formed in 1983 and incorporated in 1990 with Mustaine receiving eighty percent of the stock and Ellefson receiving twenty percent of the stock. Ellefson claimed that Mustaine and Megadeth defrauded him out of his share of corporate profits. In October 2003 the parties entered negotiations to settle the disputes between them, leading to discussions of a buy-out of Ellefson's share of the corporation.
On April 16, 2004, Ellefson was sent a proposed "Settlement and General Release" for purchasing his interest and various licensing agreements. During the week of May 10, 2004, Mustaine imposed a 5 p.m. deadline on May 14, 2004, to sign the agreement and complete the settlement. On May 14, shortly after 4:45 pm, Ellefson sent a completed signature page via fax after receiving the final agreement. Four days after the faxing of the contract, defendant's counsel mailed out full copies of the agreement. Ten days after the faxing of the agreement Ellefson notified defendant's counsel that he "withdraws from these negotiations and withdraws all proposals."
Arguments and judgement
The plaintiff argued for the mail copies a late acceptance of the contract considered a counteroffer and being late is a violation of the terms in the offer, and that the offer lapsed due to the expiration of time. The fax was immaterial since it did not contain any terms in the contract. Because Ellefson did not comply with the terms, it is not a valid acceptance because there was no mutual assent formed. The plaintiff argued that the court should reject that the regular U.S. mail was an unreasonable method of acceptance since it was not used in communications.
The court ruled in favor of the defendant granting their motion to enforce the settlement agreement, holding that faxing the signature page expressed the plaintiff's willingness to be bound by the agreement. The mailing of the contract by defendant's counsel constituted defendants’ acceptance under the
mailbox rule and manifested their consent of plaintiff's counteroffer, prior to the withdrawal sent by the plaintiff. No restrictions were made on the mode of acceptance. It does not preclude the use of mail to accept the counteroffer.
References
External links
*
{{Megadeth, state=plain
2005 in United States case law
United States contract case law
United States District Court for the Southern District of New York cases
Megadeth