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WHEELER v. WHITE, 398 S.W.2d 93 (Tex. 1965): Wheeler owned certain property in Port Arthur, Texas on which he wished to construct a commercial building or shopping center. He and White entered into a written loan agreement which provided that White would obtain the money necessary for the construction work from some third party, or provide it himself. Wheeler agreed, in return, to repay the loan in fifteen monthly installments at an interest rate of "not more than six (6%) per cent per annum"; he also promised to pay White a commission fee for obtaining the loan as well as a percentage share of "all rentals received from any tenants procured by White. . . ."2
After the contract had been signed, White urged Wheeler to proceed with the destruction of several buildings already on the property in order to make room for the new construction, telling Wheeler that if he (White) could not obtain loan funds from anyone else, he would supply them himself. After the buildings (which had a reasonable market value of $58,500 and a rental value of $400 per month) had been destroyed, White informed Wheeler that there would be no loan. Wheeler made an unsuccessful effort to obtain funds elsewhere, and then sued White for breach of contract, arguing in the alternative that White was liable on a theory of promissory estoppel. The trial court dismissed both causes of action. On appeal, the Texas Supreme Court agreed that the contract "did not contain essential elements to its enforceability" in that it failed to specify the amount of the monthly installments Wheeler was to pay as well as the exact rate of interest. The court also concluded, however, that Wheeler's alternative plea of promissory estoppel did state a good cause of action, and remanded the case for trial. In its opinion, the Texas court relied heavily on the holding in Goodman v. Dicker, supra page 209, particularly with respect to the problem of calculating whatever damages Wheeler might subsequently recover. Do you think the two cases are in fact similar? In which is the plaintiff's case more compelling? Suppose that Wheeler wins the trial; how exactly should his damages be measured?
June 02, 2014
Kessler, Gilmore & Kronman
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