Laclede Gas Co. v. Amoco Oil Co.
522 F.2d 33 (8th Cir. 1975)
Amoco Oil was a supplier of
natural gas, Laclede was a distributor in Missouri. Amoco had entered a
contract with Laclede to provide as much natural gas as Laclede needed to
meet their customers' demands. Laclede would maintain distribution
facilities connected to Amoco's main line and pay the "Wood River
Area Posted Price" plus 4¢ a gallon for propane.
This is an example of a requirements
The contract was originally
for one year. It automatically renewed, unless Laclede gave notice of
termination 30 days prior to contract renewal.
Amoco did not have a
similar clause to cancel the contract.
After two years, Amoco
canceled the contract and claimed that it was because the contract lacked mutuality. The Federal Energy Administration required
Amoco to resume the supply of propane and Laclede sued for a mandatory
injunction against termination of the contract (aka specific
Propane was available on the
open market. Laclede could theoretically gotten the propane from another
supplier and sued Amoco for additional costs. But they argued that they
could not guarantee the price, and could someday not have a supply
(heating fuel is a necessity, you can't cover lack of heat with $$$ and
people could freeze without a guaranteed supply).
The Trial Court found for
Amaco. Laclede appealed.
The Trial Court found that
since Laclede could arbitrarily cancel the contract, and Amoco did not
have a similar right, there was no mutuality and the contract was void.
Amoco claimed there were
four problems with the courts granting specific performance:
There was no mutuality
Remedy of specific
performance would be difficult to
The contract is
indefinitely long, and
Remedy via monetary damages
The Appellate Court reversed
and issued the injunction.
The Appellate Court found
that the mutuality argument was not a requirement.
The Court found that the
public interest is in getting fuel delivered to retail customers, and
letting suppliers cancel arbitrarily and suddenly was not in the public
Restatement of Contracts
§370 it states that "Specific
performance will not be decreed unless the terms of the contract are so
expressed that the court can determine with reasonable certainty what is
the duty of each party and the conditions under which performance is