Cemusa Inc., the Delaware subsidiary of a Spanish company, wanted to break into the US market for ‘street furniture’ (bus shelters, garbage cans and the like). It signed a letter agreement with White Pearl, a Uruguayan sociedad anónima, which agreed to provide strategic advice on RFPs from municipalities and to make introductions, in exchange for $240K deductible from any payments owed by Cemusa under a subsequent long-term agreement. The parties later signed a master agreement which gave WP a 3.75% share in revenues from any contract it helped Cemusa to win. That agreement was terminable on 30 days’ notice by either party. Both parties hoped for the issuance of a big RFP from the city of New York.

A month before the New York RFP was issued, Cemusa terminated the master agreement. It went on to win the New York contract. WP, which alleged it had spent $440K on Cemusa’s behalf, wanted 3.75% of the value of the contract, alleging a whole range of claims including breach of contract and duty of good faith, estoppel, quantum meruit, unjust enrichment and fraud.

‘So what?’, said Easterbrook CJ. ‘No rule of law entitles every business to a profit on every deal’. The fact that WP performed services after the termination of the master agreement was effectively its own problem and didn’t give rise to a quantum meruit claim: WP, ‘like the real estate agent fired before a house is listed for sale, is not entitled to more.’

There is also interesting discussion of the status of foreign corporate entitles; don’t assume even a UK limited company (much less a Uruguayan sociedad anónima) is the equivalent of a US corporation.

White Pearl Inversiones SA v Cemusa, Inc (7th Cir. 26 July 2011).