Laclede Gas Co. v. Amoco Oil Co.
United States Court of Appeals for the Eighth Circuit
522 F.2d 33 (8th Cir. 1975)
Laclede (plaintiff) and Amoco (defendant) entered into a natural gas distribution agreement. Individuals or developers would apply to Laclede for gas systems, which would request Amoco to supply the gas. Laclede’s right of cancellation was expressed in the following language: “this Agreement shall automatically continue in effect for additional periods of one (1) year each unless [Laclede] shall, not less than 30 days prior to the expiration of the initial one (1) year period or any subsequent one (1) year period, give [Amoco] written notice of termination.” There was no right of cancellation granted to Amoco under the contract. Amoco later notified Laclede that its price of propane had been increased by three cents per gallon. Laclede objected to this increase and demanded a full explanation. Instead Amoco sent a letter informing Laclede that it was terminating the agreement because the agreement lacked “mutuality." The district court found that the contract was void for lack of mutuality because Amoco did not have a right to cancel. Laclede appealed.
Rule of Law
Holding and Reasoning (Ross, J.)
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