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Scott v. Moragues Lumber Co.

    Brief Fact Summary.

    Plaintiff sued Defendant for breach of charter party agreement when Defendant chartered his vessel to a third party after agreeing to charter the vessel to Plaintiff for the transportation of lumber. The trial court ruled in favor of Plaintiff. The court of appeals affirmed. Defendant appealed.

    Synopsis of Rule of Law.

    A contract that is conditioned upon the occurrence of an event, which is at the will of a party to the contract, is not void for lack of consideration. Once the condition is met, an obligation to fulfill the contract exists.

    Facts.

    Scott (Defendant) offered to charter a vessel to Moragues Lumber Co. (Plaintiff) for the transportation of lumber. The offer was subject to the individual buying a certain vessel. The vessel was to be furnished by the individual to the corporation within a reasonable time after it was purchased. The individual purchased the vessel but chartered it to a third party instead of the corporation. Plaintiff sued Defendant for breach of charter party agreement. The trial court ruled in favor of Plaintiff. The court of appeals affirmed. Defendant appealed.

    Issue.

    Whether a contract is void for lack of mutuality of consideration when it is conditioned upon an event whose occurrence is at the will of one of the parties.

    Held.

    Yes. The court of appeals’ ruling is affirmed. A contract that is conditioned upon the occurrence of an event, which is at the will of a party to the contract, is not void for lack of consideration. Once the condition is met, an obligation to fulfill the contract exists.

    Discussion.

    Defendant argues that the alleged contract was conditioned upon his will and was therefore void for lack of consideration or mutuality of obligation. In this case, though Defendant was not obligated to purchase the ship, his decision to purchase it amounted to an acceptance of the offer, forming a contract under which he was bound to charter the ship to Plaintiff. Defendant further argues that the contract was void for failing to specify a reasonable time in which he was to purchase the ship. However, where the offer does not specify a time for acceptance, the offer may be accepted within a reasonable time. Finally, Defendant’s argument that the contract was void for the uncertainty by which damages would be calculated under the contract is rejected, as it is appropriate to fashion a remedy based on evidence presented. 


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