Law School Case Brief
J. L. McEntire & Sons, Inc. v. Hart Cotton Co. - 256 Ark. 937, 511 S.W.2d 179 (1974)
Mutual promises which constitute consideration for each other are the classic method of satisfying the doctrine of mutuality.
Appellants were 12 cotton growers. Between January 25, 1973 and March 22, 1973, each of them by separate contract agreed to sell their 1973 cotton crops to one of the appellee cotton merchants. The contracts provided that appellants would plant certain cotton acreage and, using good farming methods, deliver the quantity grown to a designated location for a price stipulated in the contract. After the contracts were made but before the cotton was to be delivered, the cotton market began an unprecedented rise which reached in some cases more than double the price at which appellants had agreed to sell. Appellant growers filed actions for declaratory judgments seeking a determination that the contracts were void because prohibited by Act 208, Acts of Arkansas, 1929. They also contended that the contracts lacked mutuality and were unconscionable.
Was there a valid and enforceable contract entered into by the parties?
The Supreme Court of Arkansas affirmed the judgment. The Court held that the contracts were to be reviewed under the circumstances that existed at the time they were made and not in retrospect. The record reflected that when the parties made their respective agreements, appellants considered the prices offered for their cotton to be good. Based on prior years, they were. There was no claim that appellees knew of the drastic price increases which were to occur later. So far as was known at the time, prices could have fallen as easily as they could have risen. There was simply no basis upon which a court would be justified in finding the contracts to be unconscionable. It is contended that the contracts ought to be voided because they lack mutuality. Appellants said that the agreements were not binding on appellees and, therefore, ought not to be enforced against appellants. The Court disagreed. In most of the contracts there was a rather ordinary promise to sell and a corresponding promise to buy. Mutual promises which constitute consideration for each other are the classic method of satisfying the doctrine of mutuality.
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