Facts
- W. M. McMichael operated a sand-producing business in the Tulsa, Oklahoma area.
- Harley T. Price, doing business as Sooner Sand Company, sold and shipped sand to markets outside the area.
- The parties entered a 10-year agreement under which McMichael would furnish Price all sand Price was able to sell, and Price would purchase that sand exclusively from McMichael.
- The contract price was set at 60% of the current market price of sand, subject to quality requirements.
- The parties performed for a period, and Price profited from sand sales.
- A dispute arose when Price claimed McMichael failed and ultimately refused to supply sand as required.
- McMichael contended Price did not make timely payments for shipments and argued the agreement was unenforceable for lack of mutuality because Price was not obligated to sell any definite quantity.
- Price sued for damages for breach of contract in the District Court of Tulsa County.
- A jury returned a verdict for Price for $7,512.51; the trial court required a $2,500 remittitur and entered judgment for $5,012.51.
Issues
- Whether the 10-year requirements-type contract was void for lack of mutuality because the buyer’s quantity was expressed as the amount he was able to sell.
- Whether the Oklahoma Supreme Court should disturb the judgment where evidence on breach and payment was conflicting.
- Whether the trial court erred by not instructing the jury on mitigation of damages when mitigation was not specifically pleaded and supported by evidence.
Decision
- The court affirmed the judgment for Price as reduced by remittitur.
- The contract was not void for want of mutuality; it imposed enforceable obligations on both parties.
- Because there was evidence reasonably tending to support the verdict, the court declined to reweigh conflicting testimony or substitute its view for the jury’s.
- The trial court did not err in declining a mitigation instruction because mitigation was not properly raised by pleadings and proof.
Legal Principles
- A requirements-type agreement in which the seller promises to supply all the buyer can sell and the buyer promises to buy exclusively from the seller is not void for lack of mutuality.
- In an action at law, an appellate court will not weigh conflicting evidence or disturb a jury verdict if there is evidence reasonably tending to support it.
- Mitigation of damages must be pleaded and supported by evidence showing how damages could have been reduced by reasonable efforts before it becomes a jury issue warranting instruction.
Conclusion
The Oklahoma Supreme Court held that an exclusive requirements contract measured by the buyer’s ability to sell can be enforceable despite the absence of a stated minimum quantity, affirmed a jury verdict supported by conflicting evidence, and required specific pleading and evidentiary support before mitigation may be submitted to the jury.