Story Case

Thomas Malley brought suit against Edward Baird upon the following document which Malley claimed was a contract.

"Agreed that I will sell Baird my two white horses for $150 each.

Thomas Malley Edward Baird." Malley's suit was brought for breach of a written contract when Baird failed to purchase the horses and render the $300 payment. Baird admitted that he had signed the paper, but maintained that it contained no promise made by him and, furthermore, was not in the form of a good contract. Is this an effective defense ?

Ruling Court Case. Shephard Vs. Carpenter, Volume 54 Minnesota Reports, Page 123; Volume 55 Northwestern Reporter, Page 906

Shephard and Carpenter made out a writing, agreeing to enter into, at some future time, a written contract, by which Shephard was to cut and haul timber for Carpenter. The writing, as they made it out, did not state when the final contract was to be formulated. It did not specify the amount of timber to be cut, nor the place where it was to be delivered, nor any terms which related to the price for the cutting and hauling.

When Shephard thereafter demanded that Carpenter fulfill the terms of the contract agreed upon, he refused to act. Thereupon, this action was brought by Shephard for damages. Carpenter contended that the writing which they drew up was not binding upon him because it was not sufficient to constitute a binding contract.

Decision

No particular form of writing is necessary to constitute a written contract. A written contract between two persons, upon a valid consideration, that they will at some specified time in the future, at the election of one of them, enter into a particular contract, specifying its terms, is undoubtedly binding and, upon a breach thereof, the party having the option, may sue for loss caused by the failure of the other party to carry out the agreement. But an agreement that they will in the future make such contract as they may then agree upon amounts to nothing. The agreement must contain the essential terms of the contract, clearly stated, otherwise there is no written contract, for the court does not know what to enforce. The alleged agreement was not incorrect as to form but does not state any enforcible promise.

Accordingly, it was held that judgment should be given for Carpenter, the defendant.

Ruling Law. Story Case Answer

Where parties choose to reduce contracts to writing, no particular form is necessary. However, they must clearly state in the writing all the essential terms of their agreement, else they have not a written contract.

If the parties agree in advance that any contract between them must be in writing, they will be bound to put their contracts in such form as they have agreed upon. If they have agreed upon no form, no particular form is necessary.

In the Story Case, the paper signed by Malley and Baird contains sufficient to show the terms of a contract existing between them. It is not necessary that the promise by Baird be in any certain form. It is necessary only that the writing show the intention of the parties. Baird's defense, therefore, is not good.