Opinion ID: 876899
Heading Depth: 1
Heading Rank: 4

Heading: breach of contrary issue

Text: Boise Cascade also maintains that both the bank and McLean are liable to it upon a breach of contract theory in that they did not perform the obligations of the instrument of July 25, 1974. The District Court decided that no contract was involved between Boise Cascade on the one hand, and McLean and First Security Bank of Anaconda on the other, because no contract existed between them. The court's decision was based on grounds of lack of consideration and lack of mutuality. Consideration is defined in section 28-2-801 MCA as [a]ny benefit conferred or agreed to be conferred upon the promisor by any other person ... The consideration recited in the July 25, 1974 instrument is that it is an inducement to Mountain Sales as seller and Boise Cascade Corporation and Manufacturer, hereinafter referred to as assignees, to begin production of the modular home. In this case, at the time of the execution of the instrument, the modular home had already been constructed and was sitting on the Missoula lot of Mountain Sales, Inc. From the viewpoint of David M. McLean, no consideration whatever transferred from Boise Cascade to him. He had agreed to purchase a modular home from Mountain Sales, Inc. which was already constructed. He had agreed to pay $26,000 for his purchase which amount he fully paid. The instrument he signed on July 25, 1974 was not addressed to any particular bank, and the balance he agreed could be allocated was no more than what he had already agreed to pay as the balance on the purchase from Mountain Sales, Inc. Boise Cascade cannot point to any benefit conferred on upon David M. McLean by it through his signature on July 25, 1974. In like manner, no benefit moved from Boise Cascade to First Security Bank of Anaconda. Its lending arrangement was made with David M. McLean and his associates, not with Boise Cascade. It had signed two instruments, one for delivery to Mountain Sales, Inc. and Boise Cascade, and the other to Mountain Sales, Inc. and First Security Bank of Missoula. The monies from First Security Bank of Anaconda were eventually deposited with the First Security Bank of Missoula. Both instruments had been procured from the bank at the instigation of Mountain Sales, Inc. No dealings occurred between any representative of Boise Cascade and First Security Bank of Anaconda. There is no consideration from Boise Cascade moving to First Security Bank of Anaconda which in any way can be considered an inducement to the bank, or a benefit conferred upon it by Boise Cascade, or could be construed as a detriment incurred by Boise Cascade through the signature received from First Security Bank of Anaconda. In that situation, again, no consideration existed. Consideration is an essential element of a contract, section 28-2-102 MCA, without which a contract does not exist. What Boise Cascade had from First Security Bank of Anaconda was simply a gratuitous promise. Such a promise cannot be enforced at all. It is well settled, as a general rule, that consideration is an essential element of, and is necessary to the enforceability or validity of, a contract. It follows from this rule that a promise not supported by any consideration cannot amount to a contract or be enforced, and that want or lack of consideration is an excuse for nonperformance of a promise. In order for a contract to be valid and binding, each party must be bound to give some legal consideration to the other by conferring a benefit upon him or suffering a legal detriment at his request. In suits upon unilateral contracts, it is only where the defendant has had the benefit of the consideration for which he bargained that he can be held bound. 17 Am.Jur.2d 428 Contracts § 86. The engagement also lacks mutuality as against both McLean and the bank, but in view of the fact that we find no consideration here, it is unnecessary to discuss lack of mutuality at length.