## Facts

- Gordon and Mary Bethea entered a conditional sales transaction with Standard Food Service for a freezer, tied to a promised program allowing them to buy food at discounted prices.
- The freezer sales contract was assigned for value to Investors Loan Corporation, which sued the Betheas for the unpaid balance after they stopped making payments.
- The Betheas admitted default but contended the freezer obligation was inseparable from the food-discount arrangement, which failed when Standard Food stopped providing the expected ongoing discount privileges and later became bankrupt.
- Evidence showed the Betheas already owned a freezer and refrigerator and agreed to the new freezer only to obtain the food discounts.
- The Betheas produced a signed certificate stating the food plan was financed for four months, could be renewed, and that they had the privilege to purchase discounted food for as long as they wished.
- The trial court treated the matter as two contracts (a four-month food contract and a separate freezer contract), found the food contract completed, and entered judgment for Investors Loan on the freezer contract.

## Issues

1. Whether the freezer sale obligation and the food-discount program were a single entire contract or two severable contracts.
2. If the transaction was entire, whether the collapse of the promised food-discount benefits discharged the Betheas’ duty to pay the freezer contract, including against the assignee.

## Decision

- The District of Columbia Court of Appeals reversed the judgment for Investors Loan Corporation.
- The court held the freezer sale and the food-discount arrangement were part of one entire bargain based on the parties’ manifested intent.
- Because the promised ongoing food-discount benefits failed, the Betheas were relieved of further liability on the freezer contract, and the assignee could not enforce the freezer obligation independently.

## Legal Principles

- Whether multiple promises constitute one contract or more than one depends primarily on the parties’ intent, including whether they assented to the promises as a single whole.
- A key test for an entire contract is whether there would have been no bargain if a promise central to the exchange were removed.
- Divisibility of subject matter and separateness or apportionment of consideration may be considered but are not conclusive in determining severability.
- When an essential part of an entire bargain fails, the resulting failure of consideration or material nonperformance may discharge the other party’s remaining duties, including against an assignee seeking to collect on one component alone.

## Conclusion

The court treated the freezer purchase and promised long-term discounted food privileges as one entire transaction; because the food-discount benefits that motivated the purchase failed, the buyers were discharged from paying the remaining freezer balance and the assignee could not recover on the contract.


Bethea v. Invs. Loan Corp., 197 A.2d 448 (D.C. 1964)