The following excerpt is from Shakey's Inc. v. Covalt, 218 USPQ 16, 704 F.2d 426 (9th Cir. 1983):
On the breach of the franchise agreement claim, the court applied Oregon law and ruled that a nonparty to a contract could recover under an attorney's fee provision in the contract and Or.Rev.Stat. Sec. 20.096 when the nonparty successfully defends against a claim that he or she is liable under the contract. The Oregon District Judge's conclusion on a question of Oregon law is entitled to substantial deference, and is reversible only if clearly wrong. See United States v. County of Humboldt, California, 628 F.2d 549, 551 (9th Cir.1980).
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