Merit Music Service, Inc. v. Sonneborn

The Sonneborns (defendants) were buying a bar and asked Merit Music Service (plaintiff), which leased coin-operated machines to bars, for a loan to help cover the purchase. They pledged their liquor license as security, believing that was Merit's only requirement, though testimony conflicted on whether Merit had also demanded they lease a minimum number of Merit machines in the new bar. After the loan closed in the presence of the Sonneborns' attorney, Merit, later that night, without the attorney present, presented the Sonneborns with what they thought was the loan paperwork but was actually a machine-leasing contract containing minimum-guarantee and exclusivity clauses. The Sonneborns signed without reading it, later claiming they never would have agreed to those terms had they known, and that Merit may have altered the contract after signing. The trial court ruled for the Sonneborns.