Summary of INDEFINITE PROMISES – Corthell v. Summit Thread Co. (1933)
Supreme Court of Maine
132 Me. 94, 167 A. 79
Procedural History: Case went to trial court.
Facts: P was employed by D as a salesman, and during his employment he perfected and patented two inventions useful to D. P offered to sell them to D, and D agreed to purchase. In the contract, P accepted $3500 for the patents and was given a raise. He also agreed to turn over any inventions he came up with in the course of his employment to D. The terms of payment to P for any future inventions was stipulated in the contract as ‘reasonable recognition…the basis and amount to rest entirely with [D].’ P completed and turned over four other inventions, for three of which D now owns the patents. Before the expiration of the contract, P asked D for his compensation and was told he would be taken care of. Contract expired, and was not renewed. P’s employment was terminated and he received no further recognition from D for his additional inventions. P filed suit to demand payment.
Issue: Does the language ‘reasonable recognition…the basis and amount to rest with the Company’ constitute terms to vague and indefinite for the contract to be enforceable? >No.
Can P recover damages under a contract with such language? >Yes.
Holding: No. D is liable, and P may recover. The promise was not illusory, the company cannot do as it pleases. It is bound by good faith to pay P a fair price for the services/patents it accepted from him.
Reasoning: If parties manifest through their words, or with reasonable implications, an intent to pay and an intent to accept a fair price, a promise to pay a fair price is not too vague for purposes of enforcement of the contract.