Wood v Lucy

Procedural Posture:

Special term (NY trial crt) denied def motion for summary judgment def appeals NY "Supreme" Court reversed plaint appeals NY Court of Appeals reversed

Facts: exclusive marketing contract with designer and agent; designer markets w/out agent, keeps profits, suit by agent

Holding: contract obligatory, good faith assumed

Reasoning: def claimed agent's promise was illusory -- in other words, she said he could have just sat there and done nothing. He wasn't obligated to do anything so there is no consideration. Court said, sorry, he made an implied promise to market the goods. He could not have just sat there and done nothing. Then he would have been in breach, so you can't say his promise was illusory Court said, both parties must have agreed based on assumption of "business efficacy." They wouldn't make a contract with someone to do nothing.

Class Notes:

This is a bilateral contract,

promise exclusive marketing rights>>

<<promise 50% of profits

Court is saving contract by reading in implied promise on part of Wood to put forth "reasonable effort" to get profits.

Court doesn't have to address what is "reasonable effort" by Wood to procure profits here. Just the implied promise to put forth reasonable efforts is enough to find consideration.

Sokolow describes court's reasoning as "NO DAMN FOOL RULE"

No damn fool would make a deal so stupid as to promise something for nothing, so a promise that makes the deal less stupid is implied

As in Mattei, Lucy is theoretically protected by the implied promise, because then if Wood were to slack off completely (which he wouldn't, but if he did) - his slacking would be a breach of contract Really, though they are saving the contract. Court is stopping seller (Lucy) from abusing doctrine of consideration to try to get out of the contract.