Sally Beauty Co. v. Nexxus Products Co‪.‬

CUDAHY, Circuit Judge. Nexxus Products Company ("Nexxus") entered into a contract with Best Barber & Beauty Supply Company, Inc. ("Best"), under which Best would be the exclusive distributor of Nexxus hair care products to barbers and hair stylists throughout most of Texas. When Best was acquired by and merged into Sally Beauty Company, Inc. ("Sally Beauty"), Nexxus cancelled the agreement. Sally Beauty is a wholly-owned subsidiary of Alberto-Culver Company ("Alberto-Culver"), a major manufacturer of hair care products and a competitor of Nexxus. Sally Beauty claims the Nexxus breached the contract by cancelling; Nexxus asserts by way of defense that the contract was not assignable or, in the alternative, not assignable to Sally Beauty. The district court granted Nexxus motion for summary judgment, ruling that the contract was one for personal services and therefore not assignable. We affirm on a different theory - that this contract could not be assigned to the wholly-owned subsidiary of a direct competitor under section 2-210 of the Uniform Commercial Code.