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This case looks at whether one previous transaction is enough to establish a course of dealing between parties in a future contract. Cases of Interest
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Remco Equip. Sales v. Manez

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Case Brief 1

Case Name: Remco Equip. Sales v. Manez

Case Cite: 952 S.W.2d 437 (Tenn. App. 1997).

Facts: A first time renter entered into an agreement to rent equipment from a rental company to make certain repairs upon his property. The contract contained a clause that provided for the renter to assume the rental company's attorney fees should a dispute of any kind ever arise over the contract. Upon completing the repairs on his own property, the renter called the rental company on a different occasion to rent the same equipment to make repairs on his mother's property. In other words, this would produce a separate and different contract from the first incident. However, the renter did not sign this contract, and after the equipment was dropped off the renter did not pay or return the equipment.

Procedure: A defendant renter sought review of a judgment from the Hamilton County Chancery Court in Tennessee, which found in favor of plaintiff rental company and held that the rental company was entitled to recover attorney fees as a result of a dispute arising out of a commercial transaction with the renter.

Holding: The court reversed the portion of the judgment awarding the rental company attorney fees, affirmed the remainder of the judgment, and remanded for the entry of an order dismissing the rental company's claim for attorney fees.

Reasoning: The court ruled that the renter was not liable for the rental company's attorney fees because the previous signed rental agreement was not enough to establish a course of dealing between the two parties. The court declared that proof of one prior transaction did not establish that the renter had knowledge of, or assented to the rental company's usual business practice.

Future Importance: A party to a contract must not assume that because they contracted with the same party in a similar transaction in the past that the court will automatically assume a course of dealing. Therefore, they need to be careful to include all pertinent terms in future contracts.

Critical Analysis: It appears that the court was concerned with the lack of knowledge the renter had regarding the attorney fees contract term from only one pervious transaction with the rental company. The renter did not know by accepting the equipment without have signed the contract that he was agreeing to pay the rental company's attorney fees if a dispute arose over the contract. However, the court might rule different the next time if the same renter contracted with the rental company to purchase equipment because he would have knowledge of the company's usual business practices from the previous two transactions and dispute.

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