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Standard Box Co. v. Mutual Biscuit Co.
California Court of Appeal, Third District
103 P. 938 (1909)
On September 1, 1905, Standard Box Co. (Standard Box) (plaintiff) offered an option contract to Mutual Biscuit Co. (Mutual Biscuit) (defendant). The option would have allowed Mutual Biscuit, beginning on July 25, 1906, to purchase boxes from Standard Box for one year at the 1905 price. On April 18, 1906, a serious earthquake caused a shortage of boxes. On July 25, 1906, Mutual Biscuit sought to exercise the option. Standard Box refused to sell its boxes at the 1905 price but was willing to sell to Mutual Biscuit at market price. Standard Box was aware that Mutual Biscuit would go out of business if it could not purchase the boxes. Mutual Biscuit agreed to purchase the boxes at market price, but later refused to pay for all of them. Standard Box sued to recover the outstanding balance. Mutual Biscuit counterclaimed, arguing that Standard Box was required to sell at the 1905 price, and claiming that Mutual Biscuit had agreed to purchase the boxes at market price under duress. The jury found that no option contract had been formed because Mutual Biscuit had failed to accept the option within a reasonable time. The jury found in favor of Standard Box, and Mutual Biscuit appealed.
Rule of Law
Holding and Reasoning (Chipman, J.)
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