Burger King Corp. v. Family Dining, Inc.
United States District Court for the Eastern District of Pennsylvania
426 F. Supp. 485 (E.D. Pa. 1977)
Burger King (plaintiff) granted Family Dining (defendant) 90 years of exclusive territorial rights in two Pennsylvania counties in exchange for opening one restaurant per year for ten years under franchise terms; Family Dining opened its first three restaurants on schedule but then experienced delays on its fourth, fifth, and sixth restaurants, each time receiving assurances from Burger King's founder that it had "substantially met" its obligations, since the schedule was meant to encourage mutually profitable development rather than enforce a rigid timeline. After Burger King grew and Family Dining stopped dealing directly with the founder, Burger King sent a letter in 1973 declaring Family Dining in breach for a late eighth restaurant and revoking exclusivity; after failed negotiations (during which Family Dining opened its ninth and tenth restaurants), Burger King sued for a declaratory judgment that the agreement was terminated, and Family Dining moved to dismiss.
Whether a contractual condition requiring literal, on-schedule performance may be excused, even without a stated legal excuse, when strict compliance was never treated as essential to the parties' exchange and enforcing it now would cause the promisee to forfeit substantial bargained-for rights.