## Facts

- Miami Coca-Cola Bottling Co. and Orange Crush Co. entered a written agreement styled as a license granting Miami Coca-Cola the exclusive right in a defined territory to manufacture, bottle, and distribute “Orange Crush” under Orange Crush’s trademark.
- Orange Crush agreed to supply concentrate at stated prices and to provide certain advertising support.
- Miami Coca-Cola agreed to purchase specified quantities of concentrate, maintain a bottling plant, solicit orders, and work to increase sales.
- The agreement described the license as perpetual but included a proviso allowing Miami Coca-Cola to cancel the contract at any time.
- Miami Coca-Cola alleged it purchased concentrate, manufactured the product, and began performance, but about one year after execution Orange Crush gave written notice it would no longer be bound.
- Miami Coca-Cola sued in equity seeking to enjoin Orange Crush’s cancellation and to compel specific performance.
- The district court dismissed the bill, concluding the contract was void for lack of mutuality; Miami Coca-Cola appealed.

## Issues

1. Whether an otherwise executory agreement is unenforceable for lack of mutuality when one party may terminate it at will.
2. Whether a court of equity may grant specific performance and injunctive relief to enforce such an agreement.

## Decision

- The Fifth Circuit affirmed dismissal of the suit.
- The court held the agreement, insofar as it remained executory, was void for lack of mutuality because it could be terminated at Miami Coca-Cola’s will.
- The court denied specific performance and injunctive relief, reasoning that any recovery for the period of performance could be pursued as damages at law.

## Legal Principles

- A promise-based agreement lacks mutuality and is unenforceable, at least while executory, when one party’s promise is effectively illusory due to an unrestricted right to cancel at any time.
- Equity will not specifically enforce a continuing commercial arrangement when the obligations are not mutually binding.
- When damages can compensate for the period of actual performance, an adequate remedy at law bars specific performance.

## Conclusion

Because Miami Coca-Cola could terminate the purportedly perpetual license at will, the agreement lacked mutuality and was not specifically enforceable as to future performance; Miami Coca-Cola’s potential relief, if any, lay in an action for damages for the time the parties actually performed.


Miami Coca-Cola Bottling Co. v. Orange Crush Co., 296 F. 693 (5th Cir. 1924)