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Texas Gas Utilities Co. v. Barrett

Supreme Court of Texas
460 S.W.2d 409 (1970)


In April 1964, S.A. Barrett, John Barrett, and James Beavers (defendants) executed a five-year agreement, with options to renew, for the delivery of natural gas by Associated Oil and Gas Company, the predecessor of Texas Gas Utilities Company (Gas Co.) (plaintiff). The purchased gas was intended to fuel farm irrigation equipment. Under the agreement, defendants were to make annual minimum payments to Gas Co. The agreement further provided that Gas Co. did not guarantee the quantity or quality of gas delivered, and that it would not be liable for delivery failures caused by certain events outside of its control. Gas Co. would “endeavor to supply” the gas requests of defendants, however, subject to the foregoing limitations and to Gas Co.’s obligations to provide gas for domestic use. Over the term of the agreement, gas was provided as contemplated without failure. At some point, defendants failed to make the annual minimum payments, and Gas Co. filed suit. After a jury trial, defendants moved for judgment as a matter of law. The judge concurred and issued a take-nothing judgment against Gas Co., which appealed. The appellate court affirmed the trial court judgment, holding that the contract was unenforceable because it lacked mutuality of obligation. Gas Co. appealed.

Rule of Law


Holding and Reasoning (Steakley, J.)

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