Court Opinion

ID: 7809896
Source: CourtListenerOpinion
Date Created: 2022-09-07 17:11:35.28069+00
Date Added: 2024-06-11T16:30:26.028540
License: Public Domain

McCULLOCH, C. J., (concurring). The mutuality in the contract consists of this: The manufacturer obligated itself to assign to the local dealer certain territory—the State of Arkansas—within which the latter was to have the exclusive right, for a given period of time, to sell the manufacturer’s products; and, on the other hand, the dealer obligated himself to sell those products, and no others which might come in competition with them; to establish agencies throughout the territory, and to purchase from the manufacturer as many as twenty-five cars at a stated price. The right thus acquired by the dealer was a valuable one, notwithstanding the fact that the manufacturer was, under the express language of the contract, to be exempt from liability for damages on account of failure to deliver cars. “A contract does not lack mutuality merely because every obligation of the one party is not met by an equivalent counter obligation of the other party.” 6 R. C. L. 689. It was to the interest of the manufacturer to sell the output of its factory in the various territories assigned to local dealers," and even though there was no corresponding obligation on its part to deliver to this dealer the cars which he might order, yet the obligation to assign this territory exclusively to the dealer, and not to sell to any one else in that territory, constituted sufficient consideration for the various undertakings of the dealer, including the agreement to purchase a certain number of cars. The manufacturer was unwilling to bind itself to deliver any particular number of cars in a given territory for the reason, doubtless, that it could not be definitely known in advance what the sales in various territories would be, but we ought to assume, and the dealer had the right to assume, that the manufacturer would pursue a course consonant with its own interest by delivering as many cars as it could, consistent with its trade advantages in other territories, and the dealer was, therefore, willing to contract for the exclusive right to purchase for resale cars which the manufacturer might find it convenient to furnish in that territory. That constituted a valuable consideration for the whole contract and renders it mutual in its undertakings. There was a corresponding privilege to each of the contracting parties of canceling the contract on notice for sixty days, but that did not destroy its validity. The right to cancel the contract without notice for an appreciable length of time would have rendered the contract wholly nugatory, the -immediate right of cancellation being inconsistent with the binding force of the contract, but when notice must be given for a length of time, it makes a valid contract because the obligation remains in force until the expiration of the specified period of notice. Thomas v. Anthony, 157 Pac. (Col.) 823. I do not agree with the majority, therefore, that the contract lacks mutuality, but I think that the manufacturer has by plain and unambiguous language in the contract exempted itself from liability “for any loss of profits or damage for its failure to deliver goods ordered,’’ and for that reason the judgment of the circuit court was, upon the undisputed evidence, correct.