Wednesday, December 18, 2013

Texas Gas Utilities Co. v. Barrett

Texas Gas Utilities Co. v. Barrett case brief summary
460 S.W.2d 409 (1970)


CASE SYNOPSIS
Petitioner sought review of the judgment from the Eleventh District Court, Swisher County (Texas), which held in respondents' favor in petitioner's suit against respondents' for minimum payments due under a contract between the parties.

CASE FACTS
Petitioner's predecessor and respondents entered into a contract under which petitioner's predecessor was to supply respondents' farm with natural gas. Thereafter, petitioner filed suit against respondents for payments due under the contract. The trial court held in respondents' favor, and the appellate court affirmed holding that the contract was unenforceable for lack of mutuality of obligation. Petitioner sought the court's review.

DISCUSSION

  • The court held that contract had to be based upon a valid consideration, and that a contract in which there was no consideration moving from one party, or no obligation upon him, lacked mutuality, was unilateral, and unenforceable. 
  • Further, where no other consideration was shown, mutual obligations by the parties to the agreement furnished a sufficient consideration to constitute a binding contract. 
  • Here, because petitioner's predecessor was bound to deliver natural gas to respondents' property, and where respondents were in turn bound to pay for the gas, the contract embodied an exchange of obligations of value to each party. 
  • Accordingly, the contract was enforceable against respondents, and the trial court's judgment was reversed and remanded.

CONCLUSION
Judgment in respondents' favor reversed and remanded where because the contract between the parties contained mutual obligations by the parties, it was therefore enforceable against respondents.

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