Contracts Keyed to Calamari
Texas Gas Utilities Company v. S.A. Barrett
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The Petitioner, Texas Gas Utilities Company (the "Petitioner"), brought suit against the Respondents, S.A. Barrett, John Barrett and James Beavers (the "Respondents"). A contract was entered into on April 21, 1964 between the Petitioner's predecessor-assignor, Associated Oil and Gas Company ("Associated"), and the Respondents. The assignment occurred on January 1, 1965. The term of the contract was five years with an option to renew for another five years. The purpose of the contract was to provide the Respondents with natural gas for use in water well pumps on farm properties they held an agricultural lease on. The lease was dated January 17, 1964. The contract required the Respondents to make an annual minimum payment per engine that they installed to pump water. Associated installed a five mile pipeline in March 1964, at a cost of $100,000, to deliver the natural gas. Deliveries of which began on April 6, 1964. The Respondents, prior to the date of the assignment, were evicted from the leased properties. The contract between the Petitioner and the Respondents does not discuss such a contingency. However, the contract does include a provision obligating the Petitioner to supply gas unless one of various contingencies occurs. The contract also provides that the Petitioner had to "endeavor to supply" the contracted upon amounts of natural gas. A disclaimer stated that the Petitioner disclaims any obligation "regarding the quantity or quality of the gas delivered hereunder, or the continuity of service." The trial court granted the Respondents motion for judgment on the jury verdict and as a matter of law. The court of appeals affirmed the lower court's ruling, and found that the Petitioner did not have an obligation to furnish gas because the "contract was unenforceable as lacking in mutuality of obligation."
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