Mutuality of obligation is an essential element of every enforceable agreement. However, mutuality of contract consists in the obligation on each party to do, or to permit something to be done, in consideration of the act or promise of the other. Mutuality is absent when one only of the contracting parties is bound to perform, and the rights of the parties exist at the option of one only.
Plaintiff trucker, an independent contractor, entered a contract with the defendant sugar company that called for the trucker to haul only such tonnage of beets as might be loaded by the sugar company upon the trucker's trucks. The sugar company terminated the trucker after two months of hauling. The trucker contended that he was entitled to haul until all of the beets had been transported to the factory. Plaintiff filed an action for breach of contract but the court granted summary judgment for defendant. On appeal, the court affirmed the summary judgment.
Did the agreement between the disputing parties constitute a mutual promise?
The contract was unenforceable because neither the trucker nor the sugar company intended to or did, either in fact or law, promise to transport a specific quantity of beets or promise to transport beets during a specific period of time. The term of the contract did not constitute a promise, but merely established the period of time during which the promises that were contained in the contract would be in effect. The sugar company's right to control the amount of beets loaded onto the trucker's trucks was a right to terminate the contract at any time, and rendered the contract as to its unexecuted portions void for want of mutuality.