Contracts Keyed to Farnsworth
Laclede Gas Co. v. Amoco Oil Co
Facts
Plaintiff installed central propane gas systems in residential developments, and Defendant was a supplier of propane. The parties contracted for the defendant to provide Plaintiff’s customers with propane gas. Plaintiff had the right to cancel the agreement, provided certain conditions are met. However, the contract contained no provision under which Defendant could cancel the agreement. Subsequently, Defendant notified Plaintiff that it was terminating the agreement because “the Agreement lacks ‘mutuality.'” The District Court agreed with this argument of Defendant, but the Eighth Circuit Court of Appeals reversed, holding that there was a binding contract even though Plaintiff had the right to arbitrarily cancel, but Defendant did not.
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