This section is from the book "The Law Of Contracts", by William Herbert Page. Also available from Amazon: Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises.
B may enter into a contract with A, by which he agrees to furnish A with such amount of goods as A may need or may require in his business. Such contracts are sufficiently definite,1 and A's promise to take what may be necessary for his business is generally regarded as a sufficient consideration for B's promise.2 Whether such contract may be assigned by A to C, so that C can compel B to deliver such quantity of goods as C may need in his business, is a question upon which it would appear that there was little opportunity for difference of opinion, since B in all probability was influenced by his knowledge of the public requirements of A's business, and since he may be unable to furnish as small a quantity as C may require, or he may not be able to furnish as large a quantity as C may require. It has, accordingly, been held that such a contract can not be assigned by A.3 In a case in which A agreed to furnish to B at least seven hundred and fifty tons of chalk a week, and as much more as A might require for the whole of his manufacture of Portland cement upon his land for a period of fifty years, or for a less period if the supply of chalk failed, but in any event for a period of thirty-five years, it was held that A might assign such contract to C, and that B could be compelled to furnish the amount which C might need for the manufacture of Portland cement upon the same land,4 on the theory that B was bound to furnish as much chalk as A might need for manufacturing Portland cement upon such land and that the maximum quantity was the amount which could be manufactured upon such land and that this quantity was not increased by A's assignment to C.5 In a case in which B agrees to furnish to A all the meat of certain kinds which might be required by A for his hotel, it was held that A could not assign such contract to C; but such result was based entirely upon the fact that B had agreed to give credit to A, since A was to pay for such meat at the end of each month. No attention was given to the fact that on the one hand A still remained liable under his original contract, and on the other hand, to the fact that C's requirements might be very different from A's.6 A contract by which B agreed to deliver to A its entire cut of lumber of a certain kind, except such as B might need for his retail trade, and such lumber was to be of certain lengths, but A would agree that he would accept an indefinite amount shorter than minimum length, or longer than the maximum length, was held to be non-assignable on the ground that B might be willing to allow A to exercise his discretion in determining the quantity of lumber which he would accept above or below such prescribed length, but that he would not allow C to exercise such discretion.7
7 New England Cabinet Works v. Morris, 226 .Mass. 246, 115 N. E. 315.
8 Taylor v. Palmer, 31 Cal. 241; Anderson v. De Urioste, 96 Cal. 404, 31 Pac. 266.
9 Pike v. Waltham, 168 Mass. 581, 47 N. E. 437.
1 See Sec. 90.
2 See Sec. 581.
3 Kemp v. Baerselman , 2 K. B. 604 [distinguishing, Tolhurst v. Associated Portland Cement Manufacturers Association (1903), A. C. 414].
"In my opinion this agreement contains two considerations moving to the defendant, one being the payment of the price and the other being Kemp's undertaking not to purchase eggs from any other merchant. It is obvious that the value of the latter consideration must in a large measure depend upon the person who gives the undertaking and the business carried on by him, and to that extent the personal element enters into the question; and as regards payment, it is conceded that novation can not be compulsory so as to make the person supplying the goods accept against his will the liability of another person to pay for them in substitution for the liability of the original purchaser, so that in that respect also the contract is personal; and thirdly, the contract contains a personal element in that the quantity to be supplied is measured by the requirements of Kemp himself. When he assigned his three businesses to the new company, one of them was given up and a much larger business taken in its place. That fact brings into prominence the importance of the provision in clause 1 that the defendant shall supply to Kemp as many fresh eggs as 'he shall require for manufacturing purposes.' The requirements of Kemp for manufacturing purposes are one thing, and the requirements of any one to whom Kemp may assign his business are another." Kemp v. Baerselman , 2 K. B. 604 [distinguishing, Tolhurst v. Associated Portland Cement Manufacturers Association (1003), A. C. 414].
4 Tolhurst v. Associated Portland Cement Manufacturers Association , A. C 414 [affirming, Tolhurst v. Associated Portland Cement Manufacturers Association (1902), 2 K. B. 660, which reversed, Tolhurst v. Associated Portland Cement Manufacturers (1901), 2 K. B. 811].
5 "The Imperial Company were not entitled to an unlimited supply of chalk, but only to so much as they might want for making cement on their own piece of land. I do not think their right to have chalk from Tolhurst's quarries could be assigned apart from their own land and cement works. The Imperial Company could not by alienation or otherwise increase the burdens which Mr. Tolhurst undertook to bear. But this is the only limit which I can find in the present case. Mathew, J., thought that the mere fact that the Imperial Company was a comparatively small company and that the Associated Company was much larger, and would or might want more chalk than the other, involved a material increase in the burden thrown on Mr. Tolhurst. But the learned judge apparently overlooked the fact that the Imperial Company could have increased its capital to any extent, and could have increased its cement works to any extent which the land they had bought from Mr. Tolhurst could carry. The limit of the burden thrown on Mr. Tolhurst is in any case measured by this consideration, and this limit can no more be passed by the Associated
A contract by a carrier to transport goods for a certain person as he might require has been held to be assignable,8 at least to the purchaser of such shipper's business,9 and it has also been held nonassignable.10