Summary of Wood v. Lucy Duff-Gordon
Ct. App NY 1917
Relevant Facts: The defendant styles herself ‘a creator of fashions.’ Her favor helps a sale. Manufacturers of dresses, millinery, and like articles are glad to pay for a certificate of her approval. The things which she designs, fabrics, parasols, and what not, have a new value in the public mind when issued in her name. Pl was to have the exclusive right, subject always to her approval, to place her endorsements on the designs of others. Pl was also to have the exclusive right to place her own designs on sale, or to license others to market them. In return she was to have one-half of ‘all profits and revenues’ derived from any contracts he might make. The exclusive right was to last at least one year. The pl says that he kept the contract on his part, and that the df broke it. She placed her endorsement on fabrics, dresses, and millinery without his knowledge, and withheld the profits.
Legal Issue(s): Whether a contract can be determined by the implication of a promise in exchange for compensation as consideration?
Court’s Holding: Yes
Procedure: Appeal from S Ct, App Div. Action by Wood against Lucy, Lady Duff-Gordon. From a judgment of the Appellate Division which reversed an order denying defendant’s motion for judgment on the pleading, and which dismissed the complaint, plaintiff appeals. Reversed.
Law or Rule(s): A promise may be lacking, and yet the whole writing may be ‘instinct with an obligation,’ imperfectly expressed. If that is so, there is a contract.
Court Rationale: The implication of a promise here finds support in many circumstances. 1) The df gave an exclusive privilege. 2) Wood possessed a business he adapted to the placing of endorsements as Lucy, Lady Duff-Gordon, has approved. 3) The terms of the df’s compensation are even more significant [ Unless he gave his efforts, neither he nor she could ever profit. Without an implied promise, the transaction cannot have such business efficacy, as both parties must have intended that at all events it should have].
In determining the intention of the parties the promise has a value. It helps to enforce the conclusion that the plaintiff had some duties. His promise to pay the defendant one-half of the profits and revenues resulting from the exclusive agency and to render accounts monthly was a promise to use reasonable efforts to bring profits and revenues into existence.
Plaintiff’s Argument: The acceptance of an exclusive agency created by an agreement is an assumption of its duties, and a promise by the agent to undertake and perform the terms of the contract may be implied even though it is not expressed in such agreement.
Defendant’s Argument: The agreement for employment lacks the element of consideration, as the Pl is not bound to anything.