Summary of Laclede Gas Co. v. Amoco Oil Co.
U.S. Ct. of App. 1975
Facts: The PL (Laclede) and DF (Amoco) entered into an agreement to provide central propane gas distribution systems to various residential developments in Missouri, until the gas mains were extended into these areas. Amoco notified Laclede that the cost had increased 3¢ per gallon. PL objected and demanded a full explanation. Amoco next responded with a termination of agreement letter, wherein DF claimed the right b/c the agreement lacked mutuality.
Issue: Whether there was mutuality and a contract? Whether the provision granting Pl the right to cancel the agreement without Amoco having the same right renders the contract void for lack of mutuality?
Holding: Yes there was mutuality of consideration and a contract. No.
Procedure: Trial ct. ruled contract invalid b/c it lacked mutuality. Reversed. Injunction should issue and specific performance ordered.
Rule: Specific performance is not the proper remedy when party claiming breach of contract has an adequate remedy at law, especially when it involves personal property distinguished from real estate.
Ct. Rationale: The trial court has the limited discretion whether or not to order specific performance. The injunction should be ordered and specific performance ordered as a matter of right. The lack of a specific time of duration is not fatal. The evidence revealed that the last subdivision’s gas main would be complete in 10 to 15 years. This sets a reasonable time limit on performance. The contract involves a long term supply of propane to the subdivisions. There was uncontradicted expert testimony that Pl could not find another supplier of propane willing to enter into a long term agreement.
PL A: The Df breached the contract by termination letter. Df should be ordered to perform or damages by law.
Def A: The four requirements of specific performance have not been met. There is no mutuality of remedy in K; specific performance would be difficult; the K is indefinite and uncertain; remedy at law is inadequate.
Onerous- burdensome, demanding, laborious and overwhelming.
Mutuality – Mutuality of obligation is satisfied if the decree of specific performance operates effectively against both parties and gives to each the benefit of mutual obligation.