Schlegel v. Moorhead

Brief Fact Summary. A party initially brought a specific performance action which was dismissed.  Subsequently, and based on the same facts, that party brought an action for damages.

Synopsis of Rule of Law. "[T]he legal deficiencies of inadequate consideration and lack of consent … are equally applicable to bar the enforcement of the contract at law as in equity."

Facts. This case involves an "action for damages for the alleged breach of a written contract for the sale of an oil and gas lease."  In a related matter, this same court "affirmed the dismissal of Schlegel's complaint for specific performance" because "enforcement of the option would be unjust and unreasonable because of inadequacy of the proposed consideration and because Schlegel failed to divulge on Moorhead's inquiry, information known to him indicating that the value of the lease was far in excess of the amount he had offered for it."

Issue. Are damages an appropriate remedy?

Held. No.  "[T]he legal deficiencies of inadequate consideration and lack of consent (present here because Moorhead's assent was obtained by concealment) are equally applicable to bar the enforcement of the contract at law as in equity."

Discussion. The same considerations can bar the enforcement of a contract in law or in equity.