Fisher v. Parsons

213 Cal. App. 2d 829, 29 Cal. Rptr. 210, 1963 Cal. App. LEXIS 2803
CourtCalifornia Court of Appeal
DecidedMarch 13, 1963
DocketCiv. 26375
StatusPublished
Cited by18 cases

This text of 213 Cal. App. 2d 829 (Fisher v. Parsons) is published on Counsel Stack Legal Research, covering California Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Fisher v. Parsons, 213 Cal. App. 2d 829, 29 Cal. Rptr. 210, 1963 Cal. App. LEXIS 2803 (Cal. Ct. App. 1963).

Opinion

*832 ASHBURN, J.

Oviatt Building Associates, a limited partnership, sued Ralph M. Parsons, doing business as The Ralph M. Parsons Company, for unpaid rent accrued under an oral agreement for rental of space by defendant in the Oviatt Building in downtown Los Angeles. Defendant moved to dismiss the third amended complaint and the action as sham, fictitious, and frivolous; also for entry of summary judgment in his favor; at the same time he demurred to the complaint, relying principally upon the statute of frauds. The court sustained the demurrer without leave to amend and granted the motions, stating in the minute order: “The contract pleaded is unenforceable for uncertainty and indefiniteness.” From the ensuing judgment plaintiffs appeal.

The determinative question is the correctness of the ruling upon demurrer for, as appears later, the showing upon motion for summary judgment was not sufficient to warrant that relief; the other motions turned upon the same questions as the demurrer.

The third amended complaint alleges that plaintiffs acquired ownership of the Oviatt Building in September 1956, and at the same time acquired their predecessor’s interest in all existing agreements between said predecessor, James Oviatt, and said defendant, which agreements were upon the same terms and conditions as the one made by the parties to the action (as hereinafter outlined) : that defendant had been a tenant of space in the building for 14 years prior to the making of the agreement upon which plaintiffs sue, and had occupied varying amounts of space in the building; “that Defendants are engineers and are engaged in the business of engineering large projects such as refineries, dams and similar projects throughout the world, and at all times herein mentioned required office space for personnel to an extent in keeping with engagements and projects from time to time in work; that Defendants’ requirements for such office space varied substantially from time to time, and such requirements increased when projects are in work and in turn decreased when projects are completed.” Following acquisition of the building by plaintiffs, defendant represented that his head office was located in the Oviatt Building and “that office space in said building would not, under any circumstances, be relinquished until all office space in other buildings was first abandoned, and then only in the event that their needs and requirements were contracted to such an extent that they would no longer require office *833 space; that so long as they were in business and required office space, and so long as appropriate and usable space was available in the Oviatt Building, Defendants would utilize the same to the extent of their needs and pay a reasonable rental for the same.” Defendant also said, “that their office space requirements were an unknown quantity and dependent entirely upon their being awarded engineering contracts.” The terms of the oral agreement which was made in October 1956 are alleged as follows: “(1) That Plaintiffs would continue to make available, as and when needed, all space then occupied in said building by Defendants, and would provide additional office space as and when it became possible for Plaintiffs to make such space available free from commitments to others; (2) That Plaintiffs would assume the risk, so long as Defendants remained in business, in providing and maintaining available space for Defendants under the conditions and terms above described, and that Defendants would utilize the same to the extent of their requirements so long as they remained in business ; (3) That Defendants would at all times utilize all space thus provided to the extent required for Defendants operations, and would relinquish space in said Oviatt Building only after first relinquishing all other office space occupied in the City of Los Angeles outside of said building; (4) That Defendants would pay reasonable rental value for space requested, from time to time, in said Oviatt Building.” Plaintiffs caused other tenants to vacate as rapidly as possible and assigned their space to defendant who became the occupant of “almost all office space in said building and almost all other tenancies were severed and all other tenants and prospective tenants were refused space.” Plaintiffs have fully performed all obligations on their part to be performed; defendant breached its agreement on June 30, 1958, when he vacated approximately 6½ floors of office space in said building, and again on February 28, 1959, when he moved out of an additional 1½ floors of office space; that all of the space so vacated on June 30, 1958, “was necessary to the operation of Defendants’ business”; but defendant at that time removed his operations to another office building in downtown Los Angeles where he utilized space at least equivalent to the space thus abandoned, and the defendant thereafter refused to pay any rent. It is also alleged with respect to the space which defendant abandoned on February 28, 1959, that “Defendants’ operations required such space.” A total of eight floors were vacated and “at all *834 times commencing with the dates of such removal, and to the date hereof, the operations of Defendants’ business has required office space to at least the extent of the areas vacated.” The reasonable rental value is alleged, also the amount due and unpaid, and plaintiffs pray for judgment accordingly. 1

Obviously, this was a “requirements contract” with a new twist, i.e., application to a new field of activity. The law pertaining to such contracts has been developed in the field of sales and is discussed almost altogether in that connection, but the question presented by requirement contracts is one of mutuality of obligation and there is nothing about that branch of the law which should preclude its application to other types of contracts. The question is strictly one of contract and whether its terms are sufficiently definite to be enforceable.

The general rules of requirement contracts are well settled and are stated in the following quotations.

1 Williston on Contracts (third ed.) section 104A, page 402: “A bargain to sell all that a buyer may require or use in his business, where the buyer promises to buy all of his requirements from the one source, or the seller promises to sell all that he produces to one purchaser is, by the weight of authority, held to be based on consideration. ‘Agreements to buy or sell what will be “needed” or “required” have been enforced by the courts with little difficulty, where the surrounding circumstances indicate the approximate scope of the promise. ’ Such agreements are termed ‘ requirement ’ contracts. ’ ’

46 Am.Jur., section 63, page 254: “The weight of authority supports the rule that a valid agreement is formed when one party agrees to furnish, and the other to accept and pay for, a commodity in such quantity as the buyer’s business will require or need for a designated period of time. This rule has been applied to agreements for such quantity as the buyer ‘wants,’ where the term ‘want’ is interpreted as meaning ‘needs.’ ”

Within, Summary of California Law (seventh ed.) section 75, page 81: “(2) Needs or Requirements Contract. Where the proposal is to furnish all goods of a certain kind which the other party may need or require in a certain business for a definite period, acceptance results in a contract.

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Cite This Page — Counsel Stack

Bluebook (online)
213 Cal. App. 2d 829, 29 Cal. Rptr. 210, 1963 Cal. App. LEXIS 2803, Counsel Stack Legal Research, https://law.counselstack.com/opinion/fisher-v-parsons-calctapp-1963.