## Facts

- Terminal Freezing & Heating Co. contracted in writing with William C. Frederick to sell and deliver ice for Frederick’s ice-cream manufacturing business from 1917 to 1923.
- Terminal agreed to supply Frederick’s business with such quantities as Frederick might use, up to 250 tons per week, at a fixed per-ton price, payable weekly.
- Frederick agreed not to buy ice elsewhere up to the 250-ton weekly limit; he was not required to purchase any minimum quantity.
- Before the contract term ended, Frederick sold his ice-cream plant and business to Crane Ice Cream Co. and executed an assignment purporting to transfer the contract’s rights and obligations to Crane.
- Terminal did not consent to substitution of Crane for Frederick and refused to deliver ice to Crane.
- Crane sued for damages for breach; the trial court sustained Terminal’s demurrer to the amended declaration and entered judgment for Terminal.

## Issues

1. Whether a requirements contract to supply a particular buyer’s business with up to a stated weekly maximum is of a personal character that bars assignment or delegation to a different entity without the seller’s consent.
2. Whether Frederick’s sale of his business and plant, making his continued performance impossible, constituted a repudiation that prevented enforcement against Terminal by an assignee.

## Decision

- The Court of Appeals of Maryland affirmed the judgment for Terminal.
- The court held the contract was personal in character and not assignable (as to rights or liabilities) to Crane without Terminal’s consent.
- The court held Frederick repudiated the contract by selling his business and plant and thereby making his own performance impossible.
- Terminal’s refusal to deliver ice to Crane was not a breach because Terminal was not bound to accept a substituted contracting party.

## Legal Principles

- As a general rule, a contract cannot be enforced by or against a nonparty, though substitution without consent may be possible depending on the contract’s nature and the parties’ presumed intent.
- In executory bilateral contracts, each side holds both rights and duties; attempted assignment of rights or delegation of duties may fail when the contract is personal in character.
- Contract liabilities are not assignable inter vivos; a party cannot substitute another’s liability for its own, even if beneficial rights may often be assigned.
- Performance of a duty may be delegated only when performance by the delegate would be substantially the same as performance by the original obligor and the other party has no substantial interest in requiring the original obligor’s performance or control.
- In open-quantity requirements arrangements, the seller may have a substantial interest in the specific buyer’s commercial competence, honesty, and continuing credit; the law protects a party’s freedom to choose its contracting counterparty.
- A buyer who goes out of business and sells the plant necessary to continue performance under a requirements-type purchasing obligation repudiates the contract by making performance impossible.

## Conclusion

The court treated the ice requirements agreement as dependent on the identity, business stability, and credit of the original buyer, making it nonassignable without the seller’s consent; Frederick’s sale of his business also repudiated the agreement, so Terminal owed no duty to supply ice to Crane under the purported assignment.


Crane Ice Cream Co. v. Terminal Freezing & Heating Co., 147 Md. 588, 128 A. 280 (1925)