Gray v. Reynolds, 514 So. 2d 973 (Ala. 1987) case brief

Case Citation:      Gray v. Reynolds, 514 So. 2d 973 (Ala. 1987).

Parties:                 Van Gray, Plaintiff / Appellant     

                              James M. Reynolds and J. Eugene Garrison, Defendants / Appellees

Facts: Gray (buyer) claims the he entered into a contract with Reynolds and Garrison (sellers) to purchase sawdust at a set price. But, before Gray fulfilled his obligations under the contract, Reynolds and Garrison sold the sawdust to a third party at twice the price Grey agreed to pay the sellers. The trial court found that the agreement between Grey and the sellers merely constituted a standing offer from the sellers which allowed Grey to purchase and remove the sawdust whenever Grey needed to do so (Gray v. Reynolds, 514 So. 2d 974 (Ala. 1987)).

Procedural History:  This is an appeal of an Alabama Circuit Court decision in a breach of contract action against the plaintiff (Grey, 514 Ala. at 974).


Issue 1:  Whether, the agreement between Grey and the sellers constituted an enforceable contract?  

Issue 2:  Whether the sellers were in breach of contract when they sold the saw dust to a third party?


Issue 1:  Yes, the court held that the trial court erred in ruling that the contract was no more than a standing offer (Grey, 514 Ala. at 976).

Issue 2:  Yes, the court held that Reynolds breached the contract by selling the sawdust to the third party at a higher price (Grey, 514 Ala. at 976).


Issue 1: 

  1. The court reasoned that the parties’ written agreement that the buyer was to purchase all the sawdust at a certain location and for weekly cash payments was unambiguous. (Grey, 514 Ala. at 975).
  2. The court reasoned that there was proper consideration because the sellers were to receive the benefit of removal of all the sawdust by the buyer for a certain price (Grey, 514 Ala. at 975).
  3. The contract did not fail because time for performance was not stated, as the parties testified that time was not of the essence (Grey, 514 Ala. at 976).
  4. The court reasoned that “where a contract, from its terms, is plain and free from ambiguity, it must be enforced as written. P & S Business, Inc. v. South Central Bell Telephone Co., 466 So. 2d 928 (Ala. 1985); Kinnon v. Universal Underwriters Ins. Co., 418 So. 2d 887 (Ala. 1982).



Issue 2:

  1. The court reasoned that the elements required to establish an enforceable contract had been satisfied and it was clear that Gray had purchased the sawdust from Reynolds. Because an enforceable contract did exist, Reynolds breached the contract when he sold some of the sawdust to a third party (Grey, 514 Ala. at 976).

Decision:   Reversed and remanded to the trial court for proceedings consistent with the court’s opinion.

Comment: This case is a good example of how appellate courts analyze both the language and performance of a party to determine whether an enforceable contract existed.

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