American Electric Power employees' breach of contract appeal case

¶ … appellate case in which a series of contracts and agreements was forged between AEP and five of its employees. Three of those five employees sued for breach of contract and the trail court dismissed the lawsuit because of three major reasons. The author of this paper feels the decision was proper and if/when it was brought to the United States Supreme Court, it should have been affirmed again.

Too Much Time before Appeal

The first reason that the decision was proper was that the appellants, and it was not even all of the five involved in the invention or subsequent agreements, is that they waited a rather long time to do their appeal and by then, any remediation of a breach of contract (even if it happened) would be very difficult and voiding the agreement would not be an equitable way to do it. This is precisely what the Ohio appellate court argued, and they were correct. Ten some-odd years is way too long to wait before claiming breach of contract and this is even more true given that the agreement being cited as being in breach was nine years before the appeal case was heard.

Conflicting & Extra Agreements

As noted throughout the case summary, there were a total of three agreements that were agreed upon and signed to by the five employees who invented the product in question. The first one was employment agreement that permitted the employees to retain rights and royalties to their inventions. Such agreements are a good idea (Nolo, 2012). However, this employee agreement was essentially, if not explicitly, nullified in the 1990 agreement that stated quite clearly that the rights were being severed so as to protect AEP and prevent a conflict of interest.

The later agreement in 1991 to bestow consideration did much the same thing but the rights to the product were already given up in 1990 it would seem and this seems to be why the justices argued that the 1990 agreement, and not the later one in 1991, was when the severing of rights took place and the compensation agreement in 1991 really should have occurred in the 1990 agreement. It would be like selling a car for ten bucks one year and then demanding and getting a new agreement the next year for the same car even though ownership has already been transferred. The agreement in 1991, in the opinion of the author of this paper, was basically window dressing for what had already occurred the year prior. As such, it is not enforceable.

Conclusion

The appellants really should have thought out what they were doing a bit more and to make such a quibble over a buck was a waste of the court's time. Sure, there was a lot more than that at stake including rights to the product and what-not, but it is clear that the appellants were trying to use the law mechanisms of contract law to exercise bad faith to the agreement they legitimately signed off on.