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Lindner v. Mid-Continent Petroleum Corp. - 221 Ark. 241, 252 S.W.2d 631 (1952)

Rule:

The requirement of mutuality does not mean that the promisor's obligation must be exactly co-extensive with that of the promisee. It is enough that the duty unconditionally undertaken by each party be regarded by the law as a sufficient consideration for the other's promise. Of course a promise which is merely illusory, such as an agreement to buy only what the promisor may choose to buy, falls short of being a consideration for the promisee's undertaking, and neither is bound. If, however, each party's binding duty of performance amounts to a valuable consideration the courts do not insist that the bargain be precisely as favorable to one side as to the other.

Facts:

In 1949, plaintiff Mid-Continent Petroleum Corporation ("Mid-Continent") and defendants Cora Lee Lindner and her husband, Paul Lindner, executed series of documents whereby: (1) Mrs. Lindner, for a rental of one cent for each gallon of fuel sold on the premises, leased a filling station to Mid-Continent  for a term of three years, with an optional two-year extension. Mid-Continent had the right to terminate the lease at any time with 10 days' notice; (2) Mid-Continent rented the property at the same rental to Mr. Lindner, who operated station; (3) the Lindners authorized Mid-Continent to offset the rents against each other, and; (4) Mid-Continent and Lindner agreed on a price schedule at which Mid-Continent would sell petroleum products to Mrs. Lindner. In 1951, the Lindners removed Mid-Continent's advertising from the station and began buying gas and oil from a competing company. Thereafter, Mid-Continent gave notice that it elected to terminate its lease to Mr. Lindner and its agreement to sell petroleum products to him. Three days later the Lindners retaliated by attempting to cancel Mrs. Lindner's lease to Mid-Continent. When the latter demanded possession at the expiration of the 10-day notice by which its sublease to Mr. Lindner had been canceled the Lindners refused to give up the property. Mid-Continent then a filed a lawsuit against the Lindners in Arkansas state court, seeking to recover possession of the premises. After a trial before, the jury rendered a verdict awarding possession to Mid-Continent. The Lindners appealed.

Issue:

Was Mrs. Lindner's lease to Mid-Continent void for lack of mutuality on the ground that the privilege to terminate the contract with 10 days' notice was only given to Mid-Continent?

Answer:

No.

Conclusion:

The state supreme court affirmed the trial court's judgment. The court noted that mutuality did not require mirrored privileges. The court ruled that Mid-Continent's option to cancel the lease upon 10 days notice to Mrs. Lindner was not fatal to the validity of the contract. It was not an option by which Mid-Continent could terminate the lease at pleasure and without notice; at the very least it bound itself to pay rent for 10 days. Even lesser duties than this were a sufficient consideration to support a contract.

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