McBean v. City of Fresno

In McBean v. City of Fresno (1896) 112 Cal. 159, the city entered into a contract with the plaintiff to provide sewage disposal services for a period of five years. The court indicated: "Courts look with disfavor upon contracts by municipalities involving the payment of moneys which extend over a long period of time; 1. Because such contracts in their nature tend to create a monopoly in favor of the other party thereto for supplying the city with the article contracted for; 2. Because they may involve an undue restraint upon the legislative powers of the successors of the board, and prevent those successors from availing themselves of a change in the times, of opposition, of reduced rates, or of other causes operating legitimately to decrease the price of the commodity, of which decrease in price the city by reason of its contract cannot avail itself. "There is thus by law and reason a well-defined limit set to such contracts. In the absence of any other objection to them, they will not be upheld without a clear showing of a reasonable necessity for their execution. But if, on the other hand, it be made to appear that at the time of its execution the contract was fair and just and reasonable, and prompted by the necessities of the situation, or was in its nature advantageous to the municipality at the time it was entered into, then such a contract will not be construed as an unreasonable restraint upon the powers of succeeding boards." ( McBean v. City of Fresno, supra, 159, 169-170.)