Occasion: Harley T. Price (plaintiff) operated Sooner Sand Company and entered a 10 year contract with W. M. Mcmichael (defendant) who was a sand producer in Tulsa. The contract stated that McMichael would furnish Price with all the sand Price could sell, at 60% of the current market price. After a while, Price alleged McMichael refused to continue supplying sand and therefore breached the contract. However, McMichael argued the contract was void for lack of mutuality and claimed Price failed to pay on time

Legal Issue: Are contracts void if there is a lack of mutuality? In this case, the issue was whether the agreement was unfair because it said McMichael would supply “all the sand Price could sell.” The concern was that Price might not be required to sell any sand at all. Since Price was an experienced sand salesman starting a new business, the court had to decide if his promise created enough obligation to make the contract valid.

Holding: The Oklahoma Supreme Court held the contract was valid and enforceable.

Reasoning: Firstly, the court emphasized that both Price and McMichael assumed enforceable duties. McMichael bound himself to supply all the sand Price was able to sell and Price bound himself to purchase all such sand exclusively from McMichael. That reciprocal structure provided consideration and mutuality. Secondly, the court pointed out that Price already knew the sand business and that both sides had started carrying out the deal. This showed the contract was real and practical, not just a vague or conditional promise. 

Case File:

https://law.justia.com/cases/oklahoma/supreme-court/1936/23162.html