Business Law Case analysis

Topics: Contract, Law, Consideration Pages: 3 (866 words) Published: December 3, 2013
PBUS01—Summer 2013
Final Project
Name: Alice
1. Case Name, Citation, and Court
PETROLEUM REFRACTIONATING CORPORATION v.KENDRICK OIL CO.
65 F.2d 997 (1933) No. 774.
Circuit Court of Appeals, Tenth Circuit.
2. Key Facts
A. The Kendrick Company ordered a special grade of oil 1,500,000 gallons, 10% more or less from the Petroleum Corporation on January 15, 1932.
B. Under the terms of the contract, the Petroleum Corporation agreed either to sell and deliver the oil or to discontinue making the grade of oil contracted for, and to give five days' notice of cancellation of the contract.

C. On February 16, 1932, the Kendrick Company notified the Petroleum Corporation to discontinue accepting the oil after 62,601 gallons of such oil already be delivered for the reason that the grade of oil being shipped was not of the standard stipulated in the order

D. On February 21, 1932, the Petroleum Corporation resold the portion of the oil remaining undelivered under such contract at 25 cents a barrel. E. The Petroleum Corporation brought this action against the Kendrick Company to recover damages for breach of contract.

F. The Kendrick Company demurred to the petition on the ground that it did not state facts sufficient to constitute a cause of action.
G. The trial court held that there was no consideration for the promise of the Kendrick Company to purchase, and sustained the demurrer.
H. The Petroleum Corporation instituted an appeal.
3. I=Issue
Would a discontinuance by the Petroleum Corporation to manufacture the grade of oil contracted for result in such a detriment to it as would constitute a consideration for the promise of the Kendrick Company to purchase?

4. R=Rule
A benefit to the promisor or a detriment to the promisee is a sufficient consideration for a contract.
5. A=Analysis
A. The detriment need not be real; it need not involve actual loss to the promisee. The legal detriment is distinguished from detriment in fact. It is the giving up by the...
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