The hotel defended upon the ground that subjective or personal satisfaction may be the sole justification for termination of the contract. Who is correct? Explain.
The Park Plaza Hotel awarded its valet and laundry concession to Larson for a three-year term. The contract contained the following provision: “It is distinctly understood and agreed that the services to be rendered by Larson shall meet with the approval of the Park Plaza Hotel, which shall be the sole judge of the sufficiency and propriety of the services.” After seven months, the hotel gave a month’s notice to discontinue services based on the failure of the services to meet its approval. Larson brought an action against the hotel, alleging that its dissatisfaction was unreasonable. The hotel defended upon the ground that subjective or personal satisfaction may be the sole justification for termination of the contract. Who is correct? Explain.
The decision for Organization P was based on the assumption that even if its discontent is in good faith, still it is not just. It is to be judged whether the test of discontent is subjective or objective, whether the promise to perform is explicitly dependent on acceptance or contentment.
The discontent must be just in case it is objective. In case it is subjective, it is required to be authentic and in good faith, without requiring to meet a rational person's standards.
In this case, the services need approval from Organization P. Organization P's decision is going to prevail if the services are adequate. The discontent is subjective.
Based on condition precedent, Organization P is correct since the discontent, in this case, is subjective.