Supplier Agreement Was Not An Enforceable Contract

Friday, April 27, 2018 6:22 am
May 2018 - Volume 40 Number 5

Breach of Contract --- Promissory Estoppel

Williams v. Medalist Golf, Inc., 2018 U.S. Dist. Lexis 30226 (E.D. Mo. Feb. 26, 2018)

A builder of high-end golf courses and a sod supplier found that no contract existed between them; therefore, the supplier had no grounds---no purchase guarantee, no contract exclusivity, no mutual obligation---upon which to premise its damages claim.

Medalist Inc. (Medalist) was the contractor on a project to build the Gary Player Design Golf Course at Big Cedar Lodge in Ridgedale, Missouri. Sometime between 2015 and 2016, Cane Creek Sod (Cane Creek) submitted a bid to supply Meyer Zosia sod for the project. Medalist’s response was that, as long as the project owner approves of the sod, then “it looks good for you.” But when, in July 2016, the project owner inspected the sod growing at Cane Creek’s farm, it found the grass of insufficient quality and instructed Medalist to reject it. Medalist notified Cane Creek one week later. The supplier never provided any Meyer Zosia sod for the project.

Nevertheless, Cane Creek sued Medalist for breach of contract and promissory estoppel. Medalist in turn filed a motion for summary judgment based on its contention that the 65 acres of sod Cane Creek offered up was inadequate.

The problem with Cane Creek’s request for contract damages was that there was never a contract between the parties to begin with. An enforceable contract must have legal consideration and mutuality of agreement and obligation. See Teter v. Glass onion, Inc., 723 F. Supp. 2d 1138, 1159 (W.D. Mo. 2010). “Mutuality of obligation” means that “an obligation rests upon each party to do or permit to be done something in consideration of the act or promise of the other; that is, neither party is bound unless[..]