Contracts II, Pages 1216–1222

Crane Ice Cream Co. v. Terminal Freezing & Heating Co.

Court of Appeals of Maryland, 1925

Facts:

Defendant contracted to deliver up to 250 tons of ice per week to Frederick. After three years, they renewed this contract for another three. Frederick then assigned the contract to plaintiff, a large ice cream company, as part of the sale of his business. Defendant refused to deliver ice to plaintiff.

Procedural History:

Trial court dismissed the complaint.

Issue:

Could Frederick assign and delegate his contract to plaintiff?

Rule:

One can generally assign his beneficial rights and delegate his obligations, but he cannot if the liability be of such a nature that is performance by another will be substantially the same things as performance by the promisor himself. If an obligation is delegated, the delegator is remains liable if the performance is not in strict fulfillment of the contract.

Reasoning:

Defendant knew of the character, credit, and resources of Frederick and observed these in the three years they did business prior to renewing the contract. Frederick's ice use would vary from nothing to the full 250 tons. This implies that defendant entered the original contract in reliance on its knowledge of the average amount of ice personally used by Frederick.

When Frederick went out of business and sold to plaintiff, all of these changed. Plaintiff might entirely to stop using defendant's ice or max the cap when prices change. This change in particular places a greater liability on plaintiff than it anticipated.

Because of the changes to presuppositions of the contract, Frederick could not assign it.

Holding:

No, Frederick could not assign and delegate his contract to plaintiff. Affirmed.

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