Past consideration, moral obligation, and the illusory promise

A young man of twenty five comes home from a voyage abroad and falls sick among strangers. He had long since left his father's house. A man named Mills takes him in, gives him shelter and comfort, and nurses him until he dies. Afterwards the father, told what happened, writes to Mills and promises to pay the expenses. Then he changes his mind.
So here is the question. The father promised, in writing, freely, after his son had been cared for in his last days. Is that promise enforceable? Think about it before I go on, because almost everyone's first answer is yes, and the reason is a good one. He ought to pay. The court agreed that he ought to. And it held that he did not have to.
And now the question I keep asking. What exactly did these people promise each other? Mills promised nothing. He simply acted, before the father knew anything. The father promised money afterwards. Put those two side by side and you will see the difficulty. Nothing was given for the father's promise. The care had already been given, to the son, for its own sake.
Here is the first line for the board. Past consideration is no consideration. A promise made because of a benefit already received, without a prior request, was not the price of that benefit, because the benefit was not given in exchange for it. It came first. That is the whole objection, and it is the bargain test of two lectures ago, applied to time.
Second line. A moral obligation alone does not make a promise enforceable. The law leaves most duties of conscience to conscience. The courts recognise a narrow set of past obligations that a later promise can revive, a debt barred by the statute of limitations, a debt incurred as a minor, a debt discharged in bankruptcy, because in each of those an exchange once existed.
Third line, the minority position. Some courts enforce a later promise to pay for a material benefit that the promisor personally received, when the promisee did not intend it as a gift and enforcement is needed to prevent injustice. The Restatement gives this a section of its own. Most courts do not follow it. You need to know both.
Fourth line, a different problem that sits in the same lecture because it too is about promises that are not really prices. A promise that leaves the promisor free to perform or not, at will, is illusory, and an illusory promise is no consideration for the other side's real one. But a promise that obliges reasonable efforts, stated or implied from the deal, is a real promise, and it counts.
Now the case. Mills against Wyman, Massachusetts, eighteen twenty five, Chief Justice Parker. The court began by admitting the cost of its own rule. General rules of law established for the protection of honest and fair minded men, who may inconsiderately make promises without any equivalent, will sometimes screen men of a different character from engagements which they are bound in conscience to perform. This is a defect inherent in all human systems of legislation.
Then the facts, in the court's words. The kindness and services towards the sick son of the defendant were not bestowed at his request. The son was in no respect under the care of the defendant. He was twenty five years old, and had long left his father's family. On his return from a foreign country, he fell sick among strangers, and the plaintiff acted the part of the good Samaritan, giving him shelter and comfort until he died.
And the promise. The defendant, his father, on being informed of this event, influenced by a transient feeling of gratitude, promises in writing to pay the plaintiff for the expenses he had incurred. But he has determined to break this promise, and is willing to have his case appear on record as a strong example of particular injustice sometimes necessarily resulting from the operation of general rules.
The court then dealt with the argument that moral obligation is enough. It is said a moral obligation is a sufficient consideration to support an express promise, and some authorities lay down the rule thus broadly. But, the court said, there must have been some preexisting obligation, which has become inoperative by positive law, to form a basis for an effective promise.
The barred debt, the minor's debt, the bankrupt's debt. In all of those there was once a real exchange, and the later promise only removes a legal bar.
Here is the sentence to keep. It is only when the party making the promise gains something, or he to whom it is made loses something, that the law gives the promise validity. The father gained nothing. Mills had already lost what he lost. The nonsuit stood. The father did not pay.
Now the minority view, and the case that carries it. Alabama, nineteen thirty five, Webb against McGowin. Webb worked at a lumber mill, clearing the upper floor by dropping pine blocks to the ground below. One block weighed about seventy five pounds. As he started to drop it he saw McGowin on the ground directly beneath.
The only way to divert the block was to hold on to it and fall with it. He did. McGowin was untouched. Webb's leg was broken, the heel of his foot torn off, his arm broken. He was crippled for life.
A month later McGowin agreed to pay him fifteen dollars every two weeks for the rest of Webb's life, in consideration of having been saved and of the injuries Webb had received. McGowin paid for more than eight years, until he died. His executors paid a few weeks more, then stopped. Webb sued. Past consideration, said the estate. Mills against Wyman.
The Alabama Court of Appeals disagreed. Saving McGowin from death or grievous bodily harm was a material benefit to him of infinitely more value than any financial aid he could have received.
And the rule the court applied. A moral obligation is a sufficient consideration to support a subsequent promise to pay where the promisor has received a material benefit, although there was no original duty or liability resting on the promisor. The later promise, the court said, was a ratification carrying with it the presumption that a previous request for the service was made.
So what separates Webb from Mills? In Mills the benefit went to the son, not the father. In Webb the benefit went to the promisor himself, in his own body, and he paid for eight years before anyone questioned it. That is the material benefit rule. And now watch how narrow it is. North Carolina, nineteen forty five, Harrington against Taylor.
A man assaulted his wife. She took refuge in a neighbour's house. The next day he got in and attacked her again. She knocked him down with an axe and was about to bring it down on his head when the neighbour caught the axe as it descended. The blow fell on her hand and mutilated it. It saved his life. He promised to pay her damages, paid a small sum, and stopped.
The North Carolina court, in a few lines, held for him. However much the defendant should be impelled by common gratitude to alleviate the plaintiff's misfortune, a humanitarian act of this kind, voluntarily performed, is not such consideration as would entitle her to recover at law. Same rescue, same maiming, same later promise, opposite result. The difference is the court, not the facts. Webb is the minority. Harrington is the majority. Know which room you are standing in.
Now the fourth line, the illusory promise, and a short famous opinion. New York, nineteen seventeen, Wood against Lucy, Lady Duff Gordon. She was, in the court's phrase, a creator of fashions, and manufacturers paid to put her name on their goods. She gave Wood the exclusive right, subject to her approval, to place her endorsements and to market her designs, for at least a year, and she was to have half the profits. Then she endorsed things without him and kept the money.
Her defence was clever. Wood, she said, never promised to do anything. Read the agreement and you will not find a sentence in which he binds himself to sell a single design. If he promised nothing, his promise was no price for hers, and she owed him nothing. Judge Cardozo answered for the court.
It is true, he wrote, that he does not promise in so many words that he will use reasonable efforts to place the defendant's endorsements and market her designs. We think, however, that such a promise is fairly to be implied. 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.
Why imply it? Because she gave him an exclusive privilege, and her sole compensation was half of the profits resulting from his efforts. Unless he gave his efforts, she could never get anything. His promise to pay her half the profits and to account monthly, the court said, was a promise to use reasonable efforts to bring profits and revenues into existence. A real promise. Real consideration. She was bound.
Article Two wrote Cardozo's implication into the statute for goods. Section two three oh six. A lawful agreement by either the seller or the buyer for exclusive dealing in the kind of goods concerned imposes, unless otherwise agreed, an obligation by the seller to use best efforts to supply the goods and by the buyer to use best efforts to promote their sale.
Now let's change one fact. Before the son fell ill, the father had written to Mills, look after my son while he is in your town, and I will pay whatever it costs. Mills does, and the son dies. Is the father's promise enforceable? Choose an answer before I go on.
Most people say yes, and they are right, and I want you to say why with the right word. Request. The father asked for the care before it was given, and promised payment as its price. Mills gave the care in exchange. That is a bargain, and nothing about moral obligation or past consideration comes into it. The whole of today's difficulty vanishes when the promise comes first.
Change one fact again. The son was sixteen. Choose.
This one is argued, and the argument is the point. A father is bound to support a minor child, so Mills, in caring for the boy, discharged a duty that was the father's own. That is a benefit to the promisor himself, which is exactly what Mills said was missing and what Webb said was enough.
Even a Massachusetts court might find a real obligation behind the later promise. The answer is stronger for Mills, and you should be able to say that it is stronger because the benefit landed on the father.
Change one fact a third time. The Lucy agreement says that Wood may, if he wishes, place her endorsements, and may, if he wishes, market her designs. Choose.
Most people say Cardozo would imply the same obligation, and I think they are wrong. He implied a duty of reasonable efforts because the writing was silent and the deal made no sense without it. Here the writing is not silent. It says the opposite. It reserves to Wood an unlimited choice whether to perform, and that is the definition of an illusory promise. A court can fill a gap. It is much harder for a court to contradict the words the parties chose.
One last case, in a sentence, because it points to next week. Feinberg against Pfeiffer, Missouri, nineteen fifty nine. A company's directors resolved to pay a long serving bookkeeper two hundred dollars a month for life whenever she chose to retire, for her many years of long and faithful service. She retired. Years later the company stopped paying. Past services, the court agreed, are not a valid consideration for a promise. And yet she won. How she won is Module Five.
Here is what people get wrong here, and why it is tempting. The first mistake is enforcing every promise of gratitude because it feels right. The Mills court felt it too, and wrote a paragraph about it, and held the other way. The second mistake is treating Webb as the law. It is a minority rule, and Harrington shows the majority answering the same facts the other way.
The third mistake is calling a promise of best efforts too vague to enforce. It is not. Courts enforce it every day, and Cardozo implied it from silence. What courts will not do is invent an obligation the words expressly deny.
Here is the rule, in one breath. A promise made for a benefit already received, without a prior request, has no consideration, and moral obligation alone does not supply it, though a minority of courts enforce a later promise to pay for a material benefit the promisor himself received; and a promise that leaves the promisor free to perform or not is illusory, while a promise of reasonable efforts, express or implied from an exclusive deal, is real consideration. Now, five questions.