Wood v. Lucy

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Wood v. Lucy
Court Court of Appeals of New York
Citation 222 N.Y. 88, 118 N.E. 214 (1917)
Date decided December 4, 1917
Case Opinions
majority written by Hiscock CJ
joined by Cardozo, Cuddeback, McLaughlin, Andrews, Chase, Crane

Facts

Lady Duff-Gordon ("Lucy") was a celebrity who attached her name to products to help them sell in return for payment. She employed a promotor ("Wood") to help her do her business, and gave him exclusive right to license out her name in exchange for 50% of the profits he earned.

Right after the contract was signed, Lucy went out on her own and did her own dealings and did not pay Wood.

Procedural History

Wood was successful at the initial trial, but this was overturned by the lower appellate court.

Issues

Is there an enforceable contract even when there is no express promise by one of the parties?


Does a contract fail for lack of consideration if the contract's express terms don't require 1 party's performance, but the context implies a promise to make reasonable efforts?

Holding

Appeal allowed. The contract was enforceable.

No. Consideration exists if the context implies a promise to make reasonable efforts on the other party's behalf.

Reasons

Duff-Gordon claimed that there was no corresponding request to her promise – she did not request anything from Wood, thus there was no consideration. Wood did not bind himself to anything, and therefore there was no contract. However, Cardozo, writing for the majority, said that it goes without saying that anyone who contracts to do this type of thing will do his or her best. Wood's promise to render accounts and to give Duff-Gordon 50% of the profits inherently implied that he would use reasonable effort to implement the agreement.

Rule

  • For a term to be implied in a contract it has to be very obvious.
  • A promise may be lacking, and yet there might be "instinct with an obligation" imperfectly expressed.
  • The common law of contracts has extended beyond formalism.

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