Controls, Inc. v. Langham

70 Ohio St.3d 512, 639 N.E.2d 771 (1994)

Langham, the inventor of a cross-slope monitor, entered into a contract with Balderson, Inc. to form Illinois Controls, Inc. to manufacture and market the device to road grader manufacturers.

Balderson, Inc. and its president Clark Balderson breached the contract, by not putting forth effort to market the device. Balderson, through Illinois Controls, sued Langham. Langham countersued and the jury returned a verdict in his favor in the amount of $2,776,000.

The Supreme Court of Ohio upheld the verdict, stating Balderson and Illinois Controls had a duty to use reasonable efforts to market Langham’s product. Clark Balderson, as promoter of Illinois Controls, could be personally liable for the breach of the pre-incorporation contract.

Illinois Controls, who had knowledge of the contract and benefited from it, could also be liable for the breach of contract.