Dahua Technology USA, Inc. v. Zhang, 988 F.3d 531

Zhang was Dahua's senior executive under a 2015 employment deal paying $510,000/year plus 100,000 shares; Dahua terminated him in August 2017 and negotiated a separation/consulting package.
Negotiations produced multiple draft separation documents; Dahua’s outside-counsel template release had a blank monthly-payment line that Dahua’s in-house drafter filled with "680,000," which Dahua later said was a mistake.
The signed release contained confidentiality, non-compete, non-disparagement, a release of claims, surrender of stock rights, and an option to accelerate severance; Zhang signed and received monthly payments that totaled far less than $680,000/month (Dahua paid $62,500/month combining consulting and severance).
Dahua sued for a declaration that the release was unenforceable and sought reformation on mistake and damages for breach of the implied covenant of good faith; Zhang counterclaimed for breach (seeking $680,000/month).
The district court (applying Massachusetts law) granted Dahua summary judgment, reformed the agreement to $680,000 total (i.e., $42,500/month for 16 months), and denied attorneys’ fees; First Circuit vacated the grant of summary judgment and remanded, holding material factual disputes exist and that Massachusetts law governs.

Issue	Zhang's Argument	Dahua's Argument	Held
Choice of law: enforceability of Virginia choice clause	Release expressly chooses Virginia law; court must apply Virginia law	Virginia has no substantial relationship and clause resulted from inadvertent template language	Clause ineffective under Restatement §187; Massachusetts law governs
Waiver of unilateral-mistake defense	Dahua waived any mistake defense and cannot assert it now	Zhang failed to preserve his waiver argument below; Dahua did not waive	Zhang failed to preserve waiver claim; Dahua did not waive the defense
Contract reform / mutual vs unilateral mistake on summary judgment	Zhang: agreement unambiguous; he relied on written $680,000/month; summary judgment for Zhang appropriate	Dahua: $680,000 entry was mistake (mutual or unilateral); Zhang knew or should have known; summary judgment for Dahua appropriate	Triable issues of fact exist as to who erred and what each party knew; summary judgment for Dahua vacated; denial of Zhang’s summary judgment affirmed
Attorneys’ fees (cross-appeal)	Dahua: fees warranted as damages after finding breach	Zhang: N/A	Cross-appeal dismissed as moot because district-court judgment granting Dahua was vacated

Anderson v. Liberty Lobby, 477 U.S. 242 (summary-judgment standard; genuine dispute for jury)
Polaroid Corp. v. Travelers Indem. Co., 610 N.E.2d 912 (Mass. 1993) (reformation for mistake requires full, clear, decisive proof)
Oxford Glob. Res., LLC v. Hernandez, 106 N.E.3d 556 (Mass. 2018) (upholding parties’ choice of law unless contrary to public policy)
Nissan Autos. of Marlborough, Inc. v. Glick, 816 N.E.2d 161 (Mass. App. Ct. 2004) (elements of unilateral mistake under Massachusetts law)
LaFleur v. C.C. Pierce Co., 496 N.E.2d 827 (Mass. 1986) (mutual-mistake elements)
Robidoux v. Muholland, 642 F.3d 20 (1st Cir. 2011) (appellate review of summary judgment/cross-motions)
Mancini v. City of Providence ex rel. Lombardi, 909 F.3d 32 (1st Cir. 2018) (failure to raise argument in briefing forfeits issue)
DeCambre v. Brookline Hous. Auth., 826 F.3d 1 (1st Cir. 2016) (mootness of cross-appeal when primary judgment vacated)