## Facts

- A Louisville whisky dealer and a Kentucky distiller executed a four-year written agreement for specified annual quantities of bottled-in-bond “old Walker whisky” at fixed prices, to be sold under the buyer’s private label.
- The agreement included a clause allowing the buyer to be released from any amount it “cannot use” for “any unforeseen reason,” in whatever amount the buyer desired.
- In 1909 and 1910, the buyer ordered and received substantially less than the stated yearly quantities.
- In 1911, after market prices increased, the buyer demanded the full stated 1911 quantity; the distiller delivered only part and refused to supply the balance.
- The buyer sued for damages for the distiller’s failure to deliver the remaining 1911 quantity.
- The trial court directed a verdict for the distiller, ruling the contract unenforceable for lack of mutuality; the buyer appealed.

## Issues

1. Whether an agreement is unenforceable for lack of mutuality where the buyer may, for “any unforeseen reason,” decline to take any portion of the goods at its own discretion while the seller remains bound to supply at fixed prices.
2. Whether the agreement could be treated as an option that became enforceable as to later demanded quantities based on the buyer’s partial orders and acceptances in earlier years.

## Decision

- The appellate court affirmed the directed verdict for the distiller.
- The court held the agreement lacked mutuality of obligation because the buyer’s “unforeseen reason” clause left it free to take none of the goods.
- The court rejected characterization of the agreement as a requirements contract because the buyer’s obligation was not tied to objectively determinable needs but to a broad discretionary escape.
- The court rejected the option theory because the buyer did not accept the option according to its terms; partial, selective ordering in early years did not bind the seller to later full-year demands.
- Prior deliveries and payments were treated as completed sales and did not supply mutuality for future deliveries.

## Legal Principles

- A contract is generally unenforceable if it is not binding on both parties; a promise that allows performance to be avoided at the promisor’s discretion is illusory and does not support enforcement.
- A requirements-type agreement may be enforceable when the buyer’s needs are objectively referable to an established enterprise and the buyer is committed to obtain those needs exclusively from the seller.
- An option becomes enforceable only upon acceptance during its life on the option’s stated terms; an optionee cannot accept only favorable portions and later compel performance of the remainder.
- Partial performance under an otherwise nonbinding arrangement does not convert future obligations into an enforceable contract absent mutual commitment.

## Conclusion

Because the buyer retained a broad contractual right to reduce or eliminate its purchases for any “unforeseen reason,” its promise imposed no enforceable duty, and the agreement lacked mutuality; the buyer therefore could not recover damages for the seller’s refusal to deliver additional whisky beyond what the seller chose to supply.


Rehm-Zeiher Co. v. F.G. Walker Co., 156 Ky. 6, 160 S.W. 777 (Ky. Ct. App. 1913)