This section is from the book "The Law Of Contracts", by William Herbert Page. Also available from Amazon: Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises.
It is occasionally provided that a contract is to take effect and that performance is to begin, but that one of the parties reserves the right to terminate such contract if he is dissatisfied with the performance of such contract. The same principles which apply to performance to the satisfaction of one of the parties, apply to conditions of this sort reserving the right to terminate the contract in case of dissatisfaction. On the one hand, genuine dissatisfaction is necessary in order to justify the termination of the contract under such a provision.1 A provision allowing a contract to be canceled "for any good cause" on sixty days' notice by either party, means any cause assigned in good faith.2 A provision in a mining contract that the owner may terminate it if satisfied that the system of mining was prejudicial to the mine, does not give him the right to terminate it arbitrarily.3 This principle applies to contracts in which the personal element is material,4 such as a contract of agency.5 Under a provision in a contract for the employment of an agent to the effect that the principal may terminate such contract if in his opinion the financial condition of the agent will make him unable to perform such contract, such election to terminate such contract must be exercised by the principal in good faith.6 Whether reasonable grounds for dissatisfaction must exist or whether a genuine dissatisfaction is sufficient, whether reasonable or not, is a question the solution of which depends upon the nature of the contract. If the contract is one which does not involve personal taste and the like, or personal services,7 such as a contract for the lease of realty which contains a provision authorizing the lessor to terminate such lease in case of dissatisfaction,8 the party who seeks to terminate such contract must show that he has reasonable grounds for dissatisfaction. If the contract is one which involves personal taste and feeling,9 such as a contract for the rendition of services of a personal nature, as long as they are "satisfactory" to the employer,10 such contract may be terminated at any time when the party to whom such power of terminating the contract is reserved is dissatisfied in good faith. In contracts of this sort, the existence of reasonable grounds for dissatisfaction is immaterial. and it can not be inquired into.11 Under a contract of agency, which by its terms may be terminated by the principal whenever he is dissatisfied with the results, the agent can not recover damages if the principal terminates such contract in good faith, whether upon reasonable grounds or not.12 In case of actual dissatisfaction, whether justified or not, an employer may terminate a contract of employment as chef,13 gardener,14 furrier,15 candy maker,16 as mining foreman,17 or manager of a business.18 A county may discharge a superintendent of bridge work, who is employed as long as his work is satisfactory to the county commissioners, where they are dissatisfied with him for advising them to accept exorbitant bids for bridge material in which he was interested, even if such advice was not within the terms of his employment, where the superintendent and the board both treated it as part of his work.19
31 Hinchliffe v. Minnesota Commercial Men's Ass'n., - Minn. -, 171 N. W. 776.
32 Hinchliffe v. Minnesota Commercial Men's Ass'n., - Minn. -, 171 N. W.
776.
33 Carlisle v. Spain, 147 Mich. 158, 110 N. W. 532.
34 Webber v. Cambridgeport Savings Bank, 186 Mass. 314, 71 N. E. 567.
1 Miller v. Atlantic City, 74 N. J. L. 345, 68 Atl. 64; Pormann v. Walsh, 97
Wis. 356, 65 Am. St. Rep. 125, 72 N. W. 881.
It is said to be sufficient if the party acts "reasonably and in pood faith under an honest sense of dissatisfaction." Dubinsky v. Wells Brothers Co., 218 Mass 232, 105 N. E. 1004.
2 Poorman v. Walsh, 97 Wis. 356, 65 Am. St. Rep. 125, 72 N. W. 881.
3 Miller v. Atlantic City, 74 N. J. L. 345, 68 Atl. 64.
1 Anvil Mining Go. v. Humble, 153 U. S. 540, 38 L. ed. 814; Cummer v. Butts, 40 Mich. 322, 29 Am. Hep. 530; Brucker v. Manistee & G. R. Ry. Co:, 166 Mich. 330, 130 N. W. 822; Holton v. Monarch Motor Car Co., 202 Mich. 271, 168 N. W. 539; Magee v. Scott Lumber Co., 78 Minn. 11, 80 N. W. 781.
2 Cummer v. Butts, 40 Mich. 322, 29 Am. Rep. 530.
3 Anvil Mining Co. v. Humble, 153 U. S. 540, 38 L. ed. 814.
4 Holton v. Monarch Motor Car Co., 202 Mich. 271, 168 N. W. 539.
5 Holton v. Monarch Motor Car Co., 202 Mich. 271, 168 N. W. 539.
6 Holton v. Monarch Motor Car Co., 202 Mich. 271, 168 N. W. 539.
7 Barr v Van Duyn, 45 Ia. 228; Clark v. Kelly (Ta.), 109 N. W. 292.
8 Clark v. Kelly (Ia.), 109 N. W. 292.
9 United States. American Music Stores v. Kussel, 232 Fed. 306, L. R. A. 1916F, 882.
Georgia. Mackenzie v. Minis, 132 Ga. 323, 23 L. R. A. (N.S.) 1003, C3 S. E. 900.
Iowa. Daniels v. Decatur County, 99 Ia. 440, 08 N. W. 718.
Michigan. Kochler v. Buhl. 94 Mich. 490; Sax v. R. R., 125 Mich. 252, 84 Am. St. Rep. 572, 84 N. W. 314; Schmand v. Jandorf, 175 Mich. 88, 44 L. R. A. (N.S.) 080, 140 N. W. 996; Garlock v. Motz Tire & Rubber Co., 192 Mich. 005, 159 N. W. 344.
Minnesota. Frary v. Rubber Co., 52 Minn. 264, 18 L. R. A. 644, 53 N. W. 1150.
New Jersey. Moriarty v. Board of Commissioners, 89 X. J. 385, 98 Atl. 405 [affirmed, Moriarty v. Board of Commissioners, 89 N. J. 385, 100 Atl. 1070].
Pennsylvania. Corgan v. George F. Lee Coal Co., 218 Pa. St. 386, 120 Am. St. Rep. 891, 07 Atl. 055.
Vermont. Rossiter v Cooper, 23 Vt. 522.
Wisconsin. Evans v. Bennett, 7 Wis. 404.
10 United States. American Music Stores v. Russel, 232 Fed. 300, L. R. A. 1916F, 882.
Georgia. Mackenzie v. Minis, 132 Ga. 323, 23 L. R. A. (N.S.) 1003, 63 S. E. 900.
Iowa. Daniels v. Decatur County, 99 Ia. 440, 68 N. W. 718.
Michigan. Koehler v. Buhl, 94 Mich. 490; Sax v. Detroit G. H. & M. R. R. Co., 125 Mich. 252, 84 Am. St. Rep. 572, 84 N. W. 314; Schmand v. Jandorf, 175 Mich. 88, 44 L. R. A. (N.S.) 680, 140 N. W. 996; Garlock v. Motz Tire & Rubber Co., 192 Mich, 665, 159 N. W. 344.
Minnesota. Frary v. American Rubber Co., 52 Minn. 264, 18 L. R. A. 044, 53 N. W. 1156.
New Jersey. Moriarty v. Board of Commissioners, 89 N. J. 385, 98 Atl. 405 [affirmed, Moriarty v. Board of Commissioners, 90 N. J. 328, 100 Atl. 1070].
Pennsylvania. Corgan v. George F. Lee Coal Co., 218 Pa. St. 386, 120 Am. St. Rep. 891, 67 Atl. 655.
Vermont. Rossiter v. Cooper, 23 Vt. 522.
Wisconsin. Evans v. Bennett, 7 Wis. 404.
11 United States. American Music Stores v. Russel, 232 Fed. 300, L. R. A. 1916F, 882.
Georgia. Mackenzie v. Minis, 132 Ga. 323, 23 L. R. A. (N.S.) 1003, 03 S. E. 900.
Iowa. Daniels v. Decatur County, 99 Ia. 440, 68 N. W. 718.
Michigan. Koehler v. Buhl, 94 Mich. 496; Sax v. R. R., 125 Mich. 252, 84 Am. St. Rep. 572, 84 N. W. 314; Schmand v. Jandorf, 175 Mich. 88, 44 L. R. A. (N.S.) 080, 140 N. W. 990; Garlock v. Motz Tire & Rubber Co., 192 Mich. 665, 159 N. W. 344.
Minnesota. Frary v. American Rubber Co.. 52 Minn. 264, 18 L. R. A. 644, 53 N. W. 1156.
New Jersey. Moriarty v. Board of Commissioners, 89 N. J. 385, 98 Atl.
 
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