Davis v. Gen. Foods Corp.

21 F. Supp. 445 (S.D.N.Y. 1937)

 

RULE:

One of the commonest kind of promises too indefinite for legal enforcement is where the promisor retains an unlimited right to decide later the nature or extent of his performance. This unlimited choice in effect destroys the promise and makes it merely illusory. 

FACTS:

Plaintiff alleged that the parties entered into a contract whereby plaintiff would reveal to the corporation a recipe for the creation and sale of flavors for making ice cream at home, and the corporation would pay plaintiff reasonable compensation for the idea.The terms of the agreement were contained in a letter sent by the corporation. Plaintiff alleged that she performed all the terms and conditions of the agreement, but that the corporation refused to pay plaintiff any compensation. Defendant corporation filed a motion for judgment on the pleadings, and plaintiff's complaint was dismissed on the ground that it did not state facts sufficient to constitute a cause of action.

ISSUE:

Did the letter sent to plaintiff constitute a binding agreement?

ANSWER:

No.

CONCLUSION:

The court held that the letter the corporation sent to plaintiff indicating that any compensation provided for plaintiff's idea would rest in the corporation's sole discretion was so indefinite as to terms that it could not give rise to a binding obligation. The unlimited right of the corporation to decide later the nature or extent of its performance effectively destroyed any promise and made it merely illusory. The court also rejected plaintiff's contention that she was entitled to recover upon quantum meruit, concluding that the facts as alleged were inconsistent with the existence of a contract implied in fact and did not give rise to a quasi-contract or obligation implied in law. The court held that where the form or character of the promise led to the conclusion that a party did not rely upon it as a contractual obligation but trusted the fairness and liberality of the other party, there was no contract nor misreliance upon a supposed contract.

Click here to view the full text case and earn your Daily Research Points.