Question

In Mr. W Fireworkd, Inc. v. Ozuna, the Court of Appeals decided not to enforce a certain provision of the contract between the landowner, Mr. Ozuna, and the lessee, Mr. W Fireworks. Explain what provision of the lease Mr. W Fireworks sought to enforce and why the court refused to do so.

Answer 1

In the instant case, Mr. W. Fireworks Inc., the appellant had contracted for the exclusive right to sell fireworks on properties of three different owners. Each contract stipulated that:

a. The contract was voidable if fireworks became unlawful during the tenure of the contract, and

b. The lessors shall not sell or lease a part of their property to any of the competitors of the appellant for ten years after the lease was terminated.

An ordinance passed by the city of San Antonio stipulated that no fireworks would be sold within the boundary of the city limits. The properties leased to Mr. W Fireworks were outside the boundary, and hence Mr. W was able to sell fireworks out of these locations for almost three years. By January, 2006 however, boundary of the city was changed, and the properties were now within city limits and it was no longer legal to sell fireworks on any of them. Therefore, the lease was rendered void by the operation of law, and was discharged. It has become illegal to sell fireworks from these lands now.

In March 2008 however, it was again possible to sell fireworks in these three properties, as the boundary of the city was redefined. The owners contracted with Alamo Fireworks Inc. to sell fireworks on their respective properties. Alamo was a competitor of Mr. W, and ten years had not lapsed since the termination of the lease with Mr. W.

Mr. W sued the three property owners for breach of contract, on the ground that their contract with them had only been discharged as to the lease ( the first stipulation ), but not as to the ten-year restriction ( the second condition ). The lessors successfully moved the trial court on the ground that the entire contract had been rendered void, and no part of it was enforceable.

Mr. W appealed, and the Court of Appeals upheld the ruling of the trial court that the entire contract was void. It was held that a contract may be rescinded or enforced in its entirety. Mr. W cannot argue that the illegalization of fireworks rendered the contract void as to the first condition only, while the contract remains open as to the ten-year restriction.A contract cannot be partially void, and partially enforceable.