What contract, if any, exists between Snyder and Union?

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What contract, if any, exists between Snyder and Union?

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The Snyder Mfg. Co., being a large user of coal, entered into separate contracts with several coal companies. In each contract, it was agreed that the coal company would supply coal during the entire year in such amounts as the manufacturing company might desire to order, at a price of $55 per ton. In February, the Snyder Company ordered one thousand tons of coal from Union Coal Company, one of the contracting parties. Union Coal Company delivered five hundred tons of the order and then notified Snyder Company that no more deliveries would be made and that it denied any obligation under the contract. In an action by Union Coal to collect $55 per ton for the five hundred tons of coal delivered, Snyder files a counterclaim, claiming damages of $1,500 for failure to deliver the additional five hundred tons of the order and damages of $4,000 for breach of agreement to deliver coal during the balance of the year. What contract, if any, exists between Snyder and Union?

Explanation & AnswerSolution by a verified expert

Explanation

This is a case of illusory promise in whichthere is no obligation to fulfil the promise. There is no imposed obligation on the promisor to perform, and thereby,may or may not receive reasonable legal consideration.

Verified Answer

There is no valid contract between Companies S and U.It is a case of illusory promise as there is no compulsion on the maker of the statement to fulfil the promise.

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