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May 13, 1981


The opinion of the court was delivered by: DUFFY

This is an action for a permanent injunction and damages resulting from the allegedly unlawful interference of defendant Harlequin Enterprises Limited ("Harlequin") with the contractual relationship between plaintiff Pinnacle Books, Inc. ("Pinnacle") and its most successful author, Don Pendleton ("Pendleton"). Pinnacle claims that Harlequin induced Pendleton to breach his contract with Pinnacle and to enter into an agreement with Harlequin pursuant to which it will publish new books in or relating to a series of paperback men's action/adventure books entitled "The Executioner" (sometimes referred to herein as the "Series"). Pinnacle now moves for summary judgment.


Pinnacle is a publisher of mass-market and trade paperback books. The company has offices in New York City and Los Angeles. It has been publishing "The Executioner" series since the inception of the series in 1969. Pinnacle has published thirty-eight different titles in "The Executioner" series and sold approximately twenty million copies. Pendleton, the author of the Series, is the copyright owner of the Series.

 In 1976, Pinnacle and Pendleton entered into an agreement whereby Pinnacle agreed to publish books 29 through 38 in "The Executioner" series. The 1976 Agreement provided, inter alia, that Pendleton would not offer rights in "The Executioner" series to any other publisher until, after extending their best efforts, Pinnacle and Pendleton, were unable to agree on the terms of a new contract for the Series. In the event that the parties were unable to consummate a new contract, Pendleton was free to offer the Series to other publishers so long as any new publication did not occur for three months following the first publication of book 38 by Pinnacle. The pertinent provision provides:

VII. The Author grants the Publisher the option to renew this contract for the books in THE EXECUTIONER series following the ten books covered hereby on terms to be agreed, and, if, after extending their best efforts, the parties are unable to reach an agreement thereon, then Author shall be free to offer rights in such other books in THE EXECUTIONER series to any other publisher, provided the publication thereof does not occur until the expiration of 3 months following the first publication of the tenth book hereunder.

 The manuscript for the last book under the 1976 Agreement was delivered to Pinnacle on December 14, 1979. By that time, Andrew Ettinger, the Editorial Director of Pinnacle, had begun negotiations with Pendleton for an extension of the 1976 Agreement. These discussions between Ettinger and Pendleton occurred as early as September 8, 1978 and continued until November, 1979, at which time Ettinger left Pinnacle and joined Harlequin. According to Ettinger, he was unable to consummate a renewal of the 1976 Agreement before he left Pinnacle because an outstanding dispute between Pendleton and Pinnacle regarding foreign royalty rights had not been resolved. By late 1979, however, an acceptable resolution of the dispute had been reached and Pendleton was ready and willing to discuss an extension of the 1976 Agreement.

 Negotiations between Pinnacle and Pendleton continued until about February 10, 1980. According to Pinnacle, the discussions had been congenial and the conditions established by Pendleton had either been satisfied in full or could have been met if the parties had proceeded with the negotiations in good faith and using their best efforts.

 Meanwhile, Harlequin, a Canadian publisher and distributor of paperback books throughout the world, also had developed an interest in Pendleton. Having achieved spectacular success in the romance novel market, Harlequin was exploring the feasibility of entering the action/adventure line of book publishing. Ettinger, who was now affiliated with Harlequin, began meeting with Pendleton in early January, 1980, to discuss the possibility of Harlequin becoming Pendleton's publisher. On about February 10, 1980, Pendleton advised Pinnacle that, at Harlequin's invitation, he was planning to visit its Toronto headquarters where he expected Harlequin to discuss the possibility of licensing to it rights in "The Executioner" series. Pendleton also indicated that he wished to halt discussions on the Pinnacle offer until he heard from Harlequin. At the conclusion of his discussion with Harlequin, Pendleton signed a preliminary agreement to license the Series and its characters to Harlequin. On May 15, 1980, Pendleton signed the formal agreement with Harlequin pursuant to which twelve books in "The Executioner" series and four to six spin-offs from that Series would be published annually by Harlequin.

 Pinnacle instituted this action in September, 1980, against Harlequin seeking injunctive and compensatory relief. Pinnacle alleges that Harlequin, although fully aware of Pendleton's contractual obligations to Pinnacle and that Pinnacle was still negotiating with Pendleton, induced Pendleton to break off negotiations with Pinnacle just as final agreement on new contract terms was near. Pinnacle now moves for summary judgment. Harlequin argues against the motion for summary judgment on the grounds that the option clause on which Pinnacle bases its case is unenforceable. Alternatively, Harlequin asserts that before the "best efforts" obligation can be enforced, an evidentiary hearing must be held to determine (i) the intention of the parties regarding the "best efforts" clause; (ii) the compliance of both parties with their obligations under the clause; and (iii) Harlequin's interference with Pendleton's performance under the clause.


 To succeed in an action for interference with contractual relations, the plaintiff must establish first and foremost the existence of a valid contract. *fn1" Nifty Foods Corp. v. Great Atlantic & Pac. Tea Co., 614 F.2d 832, 839 (2d Cir. 1980).

 In the instant case, Pinnacle accuses Harlequin of interfering with the option clause in the 1976 Agreement. As noted above, that clause provides that, after Pendleton has fulfilled his obligation to deliver books 29 through 38 of "The Executioner" Series, the parties would use their "best efforts" to negotiate a new contract "on terms to be agreed" for delivery of an unspecified number of new Executioner books. Clause VII of the 1976 Agreement. Harlequin contends that this clause is unenforceable because either (i) it is nothing more than an unenforceable "agreement to agree"; or (ii) the material terms of the "best efforts" clause are too vague.

 Harlequin's first contention that the "best efforts" clause is an unenforceable "agreement to agree" is inappropriate in this case. Clause VII of the 1976 Agreement does not require that any agreement actually be achieved but only that the parties work to reach an agreement actively and in good faith. See Thompson v. Liquichimica of America, Inc., 481 F. Supp. 365, 366 (S.D.N.Y.1979).

 Harlequin is correct, however, in arguing that the "best efforts" clause is unenforceable because its terms are too vague. "Best efforts" or similar clauses, like any other contractual agreement, must set forth in definite and certain terms every material element of the contemplated bargain. It is hornbook ...

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