In the middle of the 48th anniversary of the Woodstock music festival, we pause to remember legendary guitarist Jimi Hendrix – and a recent lawsuit involving a dispute over ownership of two of Jimi’s guitars.  The outcome of the suit is a reminder that when you loan out $400,000 worth of Jimi Hendrix guitars, you really should have a written agreement.

In Aleem v. Experience Hendrix, L.L.C., 16 cv 9206, 2017 WL 3105870 (S.D.N.Y. Jul. 20, 2017), plaintiffs alleged that, in Fall 1968, Jimi Hendrix gifted two guitars to the twin Aleem brothers, who occasionally performed and recorded with Hendrix.  By 1995, the Aleem brothers needed money and agreed to sell one of the guitars, valued at $200,000, at auction.  The Estate of Jimi Hendrix became aware of the potential sale and approached the Aleem brothers about allowing the Estate to display the guitars at the Rock and Roll Hall of Fame.  The parties allegedly orally agreed that in exchange for $30,000, the Aleem brothers would license both guitars to the Estate for public display and upon repayment of the $30,000, the Estate would return the guitars to plaintiffs.  In 2015, the Aleem brothers said they would repay the $30,000 and demanded the Estate return the guitars.  The Estate never responded and plaintiffs filed suit.

The Estate asked the Federal Court sitting in Manhattan to dismiss the lawsuit, arguing that the New York Uniform Commercial Code (“UCC”), which governs many commercial transactions, barred enforcement of the alleged oral agreement, regardless of whether it was a license agreement or an agreement for the sale of goods.  Under the UCC, both a license agreement for personal property worth $5,000 or more and an agreement to actually sell goods worth $500 or more require a signed writing indicating that the parties agreed to a contract.  UCC section 1-207 also requires that a license agreement state the price and define the subject matter, while UCC section 2-201 requires that a sale agreement specify the quantity of goods.  The Court agreed with the Estate and dismissed the suit, holding that plaintiffs did not allege the Estate signed a writing indicating the parties agreed to a contract.

Whatever their reasons, the Aleem brothers neglected to get a signed writing from the Estate memorializing their agreement.  Now, instead of jointly owning one Jimi Hendrix guitar and splitting the potential $200,000 proceeds from the auction of the other guitar, the Aleem brothers are left with no guitars and a brief mention of their names on a Rock and Roll Hall of Fame plaque.

If you have any questions about an oral or partially documented agreement, please do not hesitate to contact us.