''McMichael v. Price'', 58 P.2d 549 (OK 1936), was a case decided by the

Supreme Court of Oklahoma The Supreme Court of Oklahoma is a court of appeal for non-criminal cases, one of the two highest judicial bodies in the U.S. state of Oklahoma, and leads the judiciary of Oklahoma, the judicial branch of the government of Oklahoma.

that held that a constraint on discretion was enough to ensure mutuality of obligation in a

requirements contract A requirements contract is a contract in which one party agrees to supply as much of a good or service as is required by the other party, and in exchange the other party expressly or implicitly promises that it will obtain its goods or services exc ...

Factual background

The plaintiff Harley T. Price formed a contract with defendant W.M. McMichael to enter the sand business, Sooner Sand Company on February 25, 1929. Specifically, part of the contract read that:

riceagrees to purchase and accept from cMichaelall of the sand ... which ricecan sell ..."

When McMichael refused to sell the sand, Price sued for breach of contract in Tulsa county. The trial jury found for plaintiff Price, and McMichael appealed.

Decision

The Supreme Court of Oklahoma affirmed the verdict for the plaintiff. McMichael argued that this was an illusory promise because it lacked mutuality of obligation - he contended that the plaintiff could escape all contract liability for simply refusing to sell sand. The court held that the contract did have mutuality of obligation because the contract constrained Price's discretion. Price was required to buy all the sand that he would sell from McMichael, so if he wanted to be in the sand business he was bound to buy from McMichael. The court noted that Price was an experienced sand salesmen, and that while the parties were in business Price was making a profit.Ayres, p. 97

References

{{United States contract case law United States contract case law 1936 in United States case law Oklahoma state case law 1936 in Oklahoma