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Keywords

contractleaseunilateral contractbilateral contract
contractleasesustainedunilateral contractbilateral contractappellantappellee

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Jackson v. Pepper Gasoline Co., 280 Ky. 226, 133 S.W.2d 91, 126 A.L.R. 1370

Facts

Paul Jackson leased a lot to the Pepper Gasoline Company for a five-year term to operate an automobile filling and service station. The lease stipulated that rent would be based on the amount of gasoline delivered to the station, with a provision allowing the lessee to remove equipment at any time. After the company terminated the lease, Jackson refused to vacate the premises, leading to a forcible detainer action against him. Jackson later sought to cancel the lease, arguing it was unilateral and lacked mutuality.

On the same day the lease was executed the Pepper Gasoline Company leased the same premises back to appellant for the same rental; that is, a sum equal to one cent per gallon on each gallon of gasoline delivered.

Issue

Is the lease between Paul Jackson and the Pepper Gasoline Company enforceable, or is it a unilateral contract lacking mutuality?

Jackson then brought this action to cancel the first lease on the ground that it is a unilateral contract and lacks mutuality.

Rule

A lease is enforceable if it contains mutual promises and sufficiently definite terms regarding rent, even if the amount is based on future performance.

The lease from appellant to appellee is a bilateral contract, since there are mutual promises between the two parties to the lease.

Analysis

The court determined that the lease was a bilateral contract with mutual obligations, as both parties had agreed to specific terms regarding the operation of the filling station and payment of rent. The rental amount, while variable, was based on the delivery of gasoline, which provided a clear standard for enforcement. The court emphasized that the lease's provisions did not grant the lessee an unrestricted right to abandon the contract.

The parties evidently intended to enter into a binding contract. Under a fair construction of the lease, the appellee agreed to operate a gasoline filling and service station on the leased premises and to have delivered at the station an amount of gasoline sufficient to supply the needs of its customers.

Conclusion

The court affirmed the dismissal of Jackson's petition, ruling that the lease was enforceable and not unilateral.

The judgment is affirmed.

Who won?

Pepper Gasoline Company prevailed because the court found the lease enforceable and concluded that Jackson's arguments regarding its unilateral nature were unfounded.

The circuit court reached the conclusion that the lease from appellant to appellee was not unilateral but enforceable, and sustained a demurrer to the petition.

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