## Facts

- F & S Petroleum Co., Inc. agreed in a signed March 9, 1977 letter to be John B. Stacks’s exclusive gasoline supplier for a new Bee Branch, Arkansas station.
- The letter stated F & S would furnish fuel “up to 50,000 gallons per month,” subject to federal allocation adjustments, and set pricing (“laid-in costs plus $.01 per gallon”), temperature correction, and payment terms (net 4 days).
- Stacks completed the outlet and later leased it to Thomas Davis.
- After the first two loads ordered by Stacks, Davis ordered subsequent gasoline deliveries that F & S delivered to the Bee Branch outlet.
- F & S kept the account in Stacks’s name and claimed an unpaid balance of $37,527.80 for delivered gasoline.
- F & S sued Stacks for the unpaid balance; a jury found for F & S.
- Stacks appealed, arguing the letter was not an enforceable requirements contract, was too indefinite, and that liability shifted to Davis after the lease; he also challenged the jury instructions.

## Issues

1. Whether the signed letter created an enforceable exclusive-dealing requirements contract despite the absence of an express minimum quantity term.
2. Whether substantial evidence supported the jury’s finding that Stacks remained liable for fuel delivered after he leased the station to Davis.
3. Whether the trial court committed reversible error in instructing the jury on requirements contracts, indefiniteness, and related commercial-law standards.

## Decision

- The appellate court affirmed the judgment for F & S.
- The court held the letter constituted an enforceable requirements contract, with quantity determined by the station’s good-faith requirements within the stated monthly maximum.
- The court held substantial evidence supported the verdict that Stacks remained the obligated buyer because the account stayed in his name and there was no release or substitution of Davis.
- The court found the jury instructions, considered as a whole, correctly stated the governing law and did not warrant reversal.

## Legal Principles

- A requirements contract may be enforceable without a fixed or minimum quantity term when the quantity is measured by the buyer’s good-faith requirements and is constrained by objective contract parameters (such as an estimate or maximum, pricing terms, and exclusive dealing).
- An “exclusive supplier” term supports the inference that the buyer agrees to purchase its requirements from the seller, making the requirements measure the operative quantity.
- Leasing a business to a third party does not, by itself, discharge the original contracting party’s liability to the seller absent an assignment accepted by the seller, a novation, or a clear agreement to look solely to the third party for payment.
- On appellate review, a jury verdict is upheld if supported by substantial evidence when the evidence is viewed in the light most favorable to the prevailing party.

## Conclusion

The court enforced the parties’ exclusive-dealing fuel-supply agreement as a requirements contract and upheld the jury’s finding that Stacks remained liable for unpaid deliveries because the seller continued to extend credit to him and never agreed to substitute the lessee as the sole obligor.


Stacks v. F & S Petroleum Co., 641 S.W.2d 726 (Ark. Ct. App. 1982)