Kirkwood-Easton Tire Co. v. St. Louis County, KIRKWOOD-EASTON

• Decision Date: 24 July 1978
• Docket Number: No. 60374,KIRKWOOD-EASTON,60374
• Citation: 568 S.W.2d 267
• Parties: TIRE COMPANY, Appellant, v. ST. LOUIS COUNTY, Missouri, Respondent.
• Court: Missouri Supreme Court

Page 267

568 S.W.2d 267

KIRKWOOD-EASTON TIRE COMPANY, Appellant, v. ST. LOUIS COUNTY, Missouri, Respondent.

No. 60374.

Supreme Court of Missouri,En Banc.

July 24, 1978.

Alan G. Kimbrell, Rosecan, Popkin & Chervitz, St. Louis, for appellant.

Marilyn Wallach, Thomas W. Wehrle, Christine C. Pernoud, Clayton, for respondent.

STOCKARD, Special Judge.

In this action for breach of contract the trial court entered judgment dismissing plaintiff's petition for failure to state a cause of action. An appeal was taken to the Missouri Court of Appeals, St. Louis District, which affirmed the judgment, but upon application of plaintiff the case was transferred here by order of this court. We now determine the cause "the same as on original appeal." Mo.Const. Art. V, § 10.

Appellant is in the business of selling automobile and truck tires. In July 1975 the County invited bids for tires needed to equip its fleet of automobiles and trucks. All bids were to conform to specifications published by the County which were to be incorporated into a contract between the County and the successful bidder.

Appellant submitted a bid that was "accepted" by the County. The parties executed an instrument evidencing the agreement which incorporated as a part thereof the specifications and bid.

Appellant pleaded that during the contract period the County purchased tires and tubes from suppliers other than it, and that the County thereby breached and repudiated the contract to the damage of appellant in the amount of $16,000.00.

Appellant contends that the agreement entered into was a "requirements contract," and that the County was legally obligated to purchase from appellant those tires and tubes described in the specifications during the period of the contract. Appellant relies on the following provisions in the contract:

"It is * * * agreed that * * * the SUPPLIER shall furnish and deliver to the COUNTY for ALL DEPARTMENTS & AGENCIES, Tires and Tubes in accordance with the attached Bid Form and Specifications. CONTRACT TERM: September 1, 1975 through August 31, 1976. * * * The following equipment shall be furnished complete and ready for operation and shall be delivered to St. Louis County Departments as required on a contractual basis * * *. The estimated requirement to be in excess of $70,000.00."

Respondent County did not file an answer, but by way of argument in its brief it asserts that it awarded more than one contract and was entitled to purchase tires and tubes from another supplier. It relies on the following provision in the bid form, which was made a part of the contract, as its authority to award more than one contract.

"H. Method of Award

A dual or multiple award may be issued if it is in the best interest of the County. Items may be awarded on an item per item basis."

A "requirements contract" is one in which one party promises to supply all the specific goods or services which the other party may need during a certain period at an agreed price, and the other party promises that he will obtain his required goods or services from the first party exclusively. Shader Contractors, Inc. v. United States, 276 F.2d 1, 149 Ct.Cl. 535 (1960); Laclede Gas Company v. Amoco Oil Company, 522 F.2d 33 (8th Cir. 1975). Missouri has for some time recognized and enforced "requirements contracts." Missouri Portland Cement Company v. Denny Concrete Company, Inc., 499 S.W.2d 432 (Mo.1973); Banner Creamery Co. v. Judy, 47 S.W.2d 129 (Mo.App.1932); Cantrell v. Knight, 72 S.W.2d 196 (Mo.App.1934). We think it clear, and the County does not contend otherwise, that the petition pleads the existence, and breach, of a "requirements contract," see Great Eastern Oil Co. v. DeMert & Dougherty, Inc., 350 Mo. 535, 166 S.W.2d 490 (1942), unless the provisions of paragraph H, set out above, result in there being no obligation on the part of the County to purchase from appellant any of the items described in the bid form and the specifications. However, the petition should not be dismissed on this basis unless it can be said as a matter of law that this is the result.

In considering the sufficiency of the petition on a motion to dismiss, the allegations are to be construed liberally and favorably to the plaintiff, giving it the benefit of all inferences fairly deducible from the facts stated. Hall v. Smith, 355 S.W.2d 52 (Mo.1...