John J. Capistrant, Respondent/cross-Appellant v. Lifetouch National School Studios, Inc., Appellant/cross-Respondent.

Summary

The court held that the return-of-property provision could operate as a condition precedent to Lifetouch's obligation to pay a residual commission, but that the court of appeals erred by deciding the condition's materiality and proportionality as a matter of law. Because the record supported conflicting inferences about whether immediate return of the property was material, the court remanded for the district court to decide materiality and, if necessary, whether enforcement would cause a disproportionate forfeiture. The court also affirmed rejection of Capistrant's arguments that he complied with the word "immediately" and that the forfeiture clause was an illegal penalty.