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GREAT DESTINATIONS, INC. v. TRANSPORTES AEREOS POR

November 21, 1978

GREAT DESTINATIONS, INC., Plaintiff,
v.
TRANSPORTES AEREOS PORTUGUESES S.A.R.L., Defendant



The opinion of the court was delivered by: SWEET

This action arises out of two alleged contracts between Great Destinations, Inc. (GDI) and Transportes Aereos Portugueses, S.A.R.L. (TAP). GDI, a New York tour operator specializing in group charter travel, contacted TAP, an overseas air carrier, in April 1976 to arrange transportation for two series of charters to commence in June 1977. David Lurie, vice president of GDI, spoke with Mr. Van Labriola, a TAP employee, concerning the dates of the proposed Portugal trips. On April 27 Gloria Duarte, TAP's Bulk Sales Supervisor, wrote to Lurie to confirm the availability of TAP aircraft for flights to Portugal on the dates Lurie had requested and specified a round trip price of $ 193 per seat. Also during April, Lurie discussed with TAP employees a series of charters to Kenya. Thus, Gloria Duarte wrote letters in early May to Lurie, informing him that TAP was negotiating for the price and availability of "747" planes.

Based upon the April 27 letter, GDI started to arrange for accommodations and other services for the Kenya trips. Lurie and Gilbert Yalman, GDI president, went to Portugal in connection with the proposed charters. TAP arranged for Lurie's and Yalman's flights to and from Portugal. While in Portugal, Lurie and Yalman made preliminary arrangements with several hotels for the proposed charters.

After returning from Portugal, Lurie spoke with Gloria Duarte on June 8, and he claims to have accepted orally the TAP "offer" as reflected in Duarte's letter of April 27. On June 11 Lurie and Yalman of GDI met Duarte and other representatives of TAP, and GDI claims to have reconfirmed its acceptance of the TAP "offer."

 Also in the spring of 1976, Lurie began to communicate with TAP about air transportation for a series of trips to Kenya. These communications included oral and written exchanges with TAP employees Duarte and Evaristo. One such letter dated May 7, 1976 from Duarte to Lurie confirmed the availability of a number of aircraft and indicated that TAP would provide written contracts "as soon as we have confirmation from our Head Office." Simon affidavit of August 4, 1978, Exhibit 2.

 In August of 1976 TAP employee Evaristo sent to Lurie two unsigned partially filled out form contracts, one for the Portugal trips and one for the Kenya trips. The Kenya form contract specified, Inter alia, a price of $ 155,660 per charter flight; 8 flight dates between June 25, 1977 and August 20, 1977; aircraft type ("B-747"); charter space ("40 passengers or more"); cancellation fee; and manner of payment. Exhibit 3. The Portugal form contract specified terms analogous to those contained in the Kenya form contract. Simon affidavit of August 4, 1978, Exhibit 5.

 Upon receipt of the two form contracts, GDI continued to make preliminary arrangements for the tours by contacting travel agents and preparing prospectuses required by the Civil Aeronautics Board. Meanwhile, in September of 1976, GDI and TAP agreed to certain "add-on" prices above the previously agreed upon $ 193 per seat for the Portugal trips. These "add-ons" were designed to accommodate potential tour participants from areas outside New York City.

 On October 8, 1976, Mr. Paul Elmstrom of TAP wrote to GDI, stating: "We still have a price problem regarding your program to Portugal . . . ." Lurie affidavit of September 18, 1978, Exhibit D. Instead of the previously quoted price of $ 192.50 per seat, TAP now offered a price of $ 300. Unable to agree upon a price for the Portugal trip, the parties did not execute a formal written contract. Apparently because of the dispute over the Portugal trips, the Kenya deal also fell through.

 During pretrial discovery on a contract claim, GDI uncovered evidence which allegedly indicates that TAP and three tour operators had established a policy of exclusive dealing. *fn1" GDI then amended its complaint, adding a fraud claim, a claim based on Section 404(b) of the Federal Aviation Act, *fn2" and an antitrust claim based on Sections 1 and 2 of the Sherman Act. *fn3"

 TAP has moved for summary judgment on all four claims described in the preceding paragraph. Summary judgment is hereby denied as to all claims except the Federal Aviation Act claim.

 The Contract Claim

 GDI's contract claim is not barred by the New York statute of frauds. *fn4" Under New York law, the statute of frauds provision is inapplicable if there is at least one writing, signed by the party to be charged, which establishes a contractual relationship between the parties. That writing, although it must contain sufficient evidence of the contract, need not contain all of the terms of the contract; other terms may be set out in separate writings, signed or unsigned. Crabtree v. Elizabeth Arden Sales Corp., 305 N.Y. 48, 55-56, 110 N.E.2d 551 (1953); Flammia v. Mite Corp., 401 F. Supp. 1121, 1133 (E.D.N.Y.1975); Kobre v. Instrument Systems Corp., 54 A.D.2d 625, 387 N.Y.S.2d 617 (1976).

 In the case at bar, plaintiff relies upon the following writings with respect to the aborted Portugal trips: the April 27 letter from TAP's Gloria Duarte to GDI's David Lurie and the unsigned TAP form contract sent to Lurie in August, 1976. With respect to the aborted Kenya trips, plaintiff relies upon a letter dated May 7, 1976 from Duarte to Lurie, a letter dated August 6, 1976 from Duarte to Lurie, and an unsigned, partially filled out TAP form contract sent to Lurie in August, 1976. These writings, taken together, satisfy the statute of frauds. Regarding the Portugal trips, the April 27 letter sets forth the essential terms, including price, destinations, dates, and availability of aircraft. The form contract expanded upon these terms. *fn5" Similarly, with respect to the Kenya trips, the two letters set forth destination, dates, type of aircraft and number of flights. Although the Kenya letters do not refer to price, internal documents of TAP indicate a price of $ 155,660, and TAP officials have admitted that there is no controversy regarding the price of the Kenya trips. Omission of the price term here does not mean that the statute of frauds must apply, because the omission is not of an "essential term" since it is not in dispute.

 
The concept of "essentiality" is relative. A term is "essential," and must thus appear in the "memorandum," if it seriously affects the rights and obligations of the parties and there is a Significant evidentiary dispute as to its content.

 Ginsberg Machine Co. v. J. & H. Label Processing Corp., 341 F.2d 825 (2d Cir. 1965). The TAP form contract embodied these terms, although the number of flights was reduced from six to four. ...


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