The Briefcase Diaries

Coffee Mania LLC v. Coffeemania Bryant Park, LLC



Coffee.  What would law school students do without coffee?  Fortunately, New York City will likely never run out of coffee shops.  Your options to choose the perfect cup of joe are endless.  Starbucks. Dunkin Donuts. Think Coffee. Coffeebean. The Bean. Bean & Bean. From franchises to small-businesses, it seems as if there is always a new coffee shop coming to town.  The question eventually becomes: How does this coffee shop differ from that coffee shop?

Interestingly enough, the U.S. District Court of New York recently heard a case between two coffee shops with nearly the same name—Coffee Mania, LLC v. Coffeemania Bryant Park, LLC. (Note the space versus the none-space.)  The dispute began in July 2014 when the plaintiff, Coffee Mania, sent the defendant, Coffeemania Bryant Park, a “cease and desist” letter, asserting violations of common law trademark rights.[1] From April 2016 to June 2016, the parties engaged in mediation sessions that anticipated a settlement agreement.[2] Still, their efforts led to an “impasse” with negotiations.[3]

As a result, the plaintiff sued for violations of the federal Lanham Act under 15 U.S.C. §1125(a).[4] Id.  The defendant argued that the parties sufficiently formed a binding contract because they “agreed to all material terms—either orally or via email.”[5] On the other hand, the plaintiff argued that that no binding agreement existed because the terms were not “consolidated into a signed, formal settlement agreement.”[6]

At first glance, this “coffee name case” appears to be your typical contract formation issue-spotter.  Let’s remember: The requirements to form a contract are mutual assent and consideration.  Mutual assent requires a manifestation of a present intent to be bound by the terms of the contract.

In fact, the Court maintained that settlement agreements must follow the general principles of contract law: mutual assent, consideration, intent to be bound, offer, and acceptance.[7]

However, the Court found that additional requirement—the “meeting of the minds”—was essential to all the terms of an agreement.[8]  To establish a “meeting of the minds,” there must be “literally nothing left to negotiate”[9] Thus, while the Court admitted that an intent to commit to their agreement did not prevent a binding contract prior to a formal, written contract, the Court found that “no such agreement existed[10]. Because the parties made changes to the terms after June 2016 via email, the Court found that the defendant failed to establish that there was “nothing left to negotiate,” and therefore, no “meeting of the minds.”[11] Accordingly, the Court held that the parties’ settlement agreement was not enforceable.[12]

It is fascinating how contract law has evolved.  By this time last year, I was reading the famous, Lucy v. Zehmer, where the court found that, although both parties were drinking, they outwardly expressed an intent to be bound by terms of an agreement formed within forty minutes (at a bar).[13] Here, the parties engaged in months of mediation sessions, each of which lasted six to eight hours, and telephone conferences with a magistrate judge.  Nevertheless, let this be a negotiation lesson for us, future lawyers:  In this day and age, leave “literally nothing left to negotiate.”[14]

[1] Coffee Mania, LLC. v. Coffeemania Bryant Park, LLC, 5:15-CV-823 (FJS/DEP), 2017 WL 3396534, at *1 (N.D.N.Y. Aug. 8, 2017).

[2] Id at *2.
[3] Id.
[4] Under 15 U.S.C. §1125(a), any person, using a commercial good, who uses “any word, term, name, symbol, or device, or any combination thereof” which—is likely to cause confusion, or to cause mistake, or to deceive as to the affiliation, connection, or association of such person with another person, or as to the origin, sponsorship, or approval of his or her good” is liable by “any person who believes he or she is likely to be damaged by such act.”
[5] Id at *3.
[6] Id at *4.
[7] Id.
[8] Id.
[9] Id at *5.
[10] Id at *5-6.
[11] Id at *6.
[12] Id.
[13] Lucy v. Zehmer, 196 Va. 493, 84 S.E. 2d 516 (1954).
[14] Coffeemania, 5:15-CV-823 (FJS/DEP), at *5.