## Facts

- Wickham & Burton Coal Co. mined and sold coal; Farmers’ Lumber Co. operated lumber yards and bought coal in carload lots for retail resale.
- In August 1916, the parties (through an agent) reached an oral arrangement that Wickham would fill Farmers’ orders for specified grades of “Paradise” coal, f.o.b. mines, shipped to destinations Farmers directed.
- The stated prices were $1.50/ton for orders up to September 1, 1916, and $1.65/ton for orders from September 1, 1916, to April 1 (or March 31), 1917.
- Wickham sent a confirming letter stating the prices and requesting a written acceptance, indicating that if the terms were satisfactory it would “consider same as a contract.”
- Farmers replied that it accepted the order for coal shipments through the end date, but did not state any minimum quantity or exclusive purchasing commitment.
- Farmers later claimed Wickham failed to deliver coal as expected and alleged damages of $3,090 for the difference between market prices paid and the stated prices.

## Issues

1. Whether the parties formed an enforceable contract for coal deliveries over the stated period when the buyer did not commit to buy any definite quantity (or any coal at all).
2. Whether the alleged agreement lacked mutuality and consideration because only the seller was bound to perform.
3. Whether the arrangement was merely a continuing offer to sell at stated prices, with each order forming a separate contract upon acceptance.

## Decision

- The Iowa Supreme Court reversed the order overruling the seller’s demurrer to the buyer’s counterclaim.
- The court held the pleaded arrangement did not create a binding, mutual contract for the full period at the stated prices.
- The court treated the seller’s promise as a continuing offer to sell at stated prices, acceptible by specific orders, rather than a single enforceable long-term supply contract.
- Because the buyer was not obligated to purchase any coal, the counterclaim failed for lack of mutuality and consideration.

## Legal Principles

- A bilateral contract requires mutual obligations: an agreement to sell must be matched by an agreement to buy; otherwise mutuality is absent.
- A promise can serve as consideration for another promise only if both parties are immediately bound to definite performance obligations.
- Where a buyer retains complete discretion to purchase nothing, the buyer’s “promise” is illusory and does not supply consideration for the seller’s promise.
- A stated-price commitment to fill orders, without a binding quantity or purchasing obligation by the buyer, may be treated as a continuing offer; each order and acceptance constitutes a separate contract.

## Conclusion

The court rejected the buyer’s attempt to recover market-difference damages on the theory of a season-long coal supply contract because the pleadings showed no enforceable commitment by the buyer to purchase any quantity; without mutuality and consideration, the arrangement was only a continuing offer that became binding, if at all, only upon individual orders.


Wickham & Burton Coal Co. v. Farmers’ Lumber Co., 189 Iowa 1183, 179 N.W. 417 (Iowa 1920)