Hutton v. Monograms Plus, Inc.
Ohio Court of Appeals
604 N.E.2d 200 (Ohio Ct. App. 1992)
Monograms Plus, Inc. (MPI) (defendant) sold David Hutton (plaintiff) a franchise with an addendum entitling him to a refund of his franchise fee if he was "unable to obtain financing suitable to him" within 90 days, financing he needed partly for a monogramming machine; an MPI liaison secured Hutton lease financing for the machine, but Hutton found the payments too high (especially compared to figures in an MPI circular) and declined to sign, then was denied financing when trying to lease from another company. Hutton invoked his refund right, MPI refused, and Hutton sued and moved for summary judgment; the trial court granted it, applying a subjective standard of what financing Hutton personally found suitable, and MPI appealed.
Whether a franchise agreement's clause conditioning a refund on the franchisee's inability to obtain financing "suitable to him" should be judged by the franchisee's own subjective satisfaction, or by an objective reasonable-person standard, given that the clause concerns commercial and financial matters.