Dyer v National By-products

Dyer v Natl. By-products

Procedural Posture:

district court said no consideration -> forborne claim no cause of action

Iowa Sup Court said: reverse and remand

Issue: does a good faith forbearance to make an invalid claim constitute consideration?

Holding: invalidity of claim does not mean he cannot argue his forbearance to pursue it as consideration, but facts of good faith remain to be determined

Reasoning: although evidence of some rulings in opp. dilrection, preponderance of precedent and 2ndary src material suggests invalidity of forborne claim

no bar to claiming consideration based on forbearance.

Disp: reversed and remanded.

Class Notes:

General note,

When asked why, answer why legally, but then also answer policy, social good, economically good, culturally good

gift promise (gratuitous promise) vs.gift (promise to gift a gift with nothing more is unenforceable)

gift:

1- intent to make gift (issue of fact)

2- transfer of property

(can be complicated: title/key)

DANGER

disparity in value not an issue if there is consideration, but in establishing consideration, disparity in value has to be considered.

(maybe at fringe of law: I give you $20 dollars now if you give me $2000 tomorrow. (May depend on circumstances)

Modern view looks upon "peppercorn" token given in return for gift to try to create legally binding promise, as insufficient to establish consideration.

both parties fear loss in contract: agreement mitigates risks

settlement agreement alleged by Dyer (If you don't litigate, we'll give you life employ)

Sonsideration will depend on facts. Need to prove good faith belief in foregone claim

b/c Dyer was paid workman's comp.

in worker's comp, board determines how much to compensate you when you are injured.

since the company paid that amount, he would have no valid tort suit.

Did he know that beforehand? Was his threat to sue in good faith? Was it deliberately frivolous?

by law, what standard for good faith?

must it be reasonable good faith?

tech good faith enoughm BUT court may consider reasonability in establishing whether or not there was good faith.

Court is trying to have it both ways, a simple good faith standard but wants to somehow incorporate reasonability into it.

Court is supporting policy argument - settlement agreements should be promoted

We don't want people to try to re-litigate settlements on the validity of the original claim.