If you've been watching these modules in the suggested order, we have now finished the introductory part of the course. We've covered cases on how to form an enforceable promise. We have been introduced to a few cases on defenses to enforcement and a couple of cases having to do with remedies. Now, we're going to go back and take up in more depth how to create enforceable contracts and starting again with the concept of consideration. In an earlier lecture we talked about consideration as a traditional prerequisite for forming a contract by introducing that concept with the classic chestnut of a case Hamer versus Sidway. You remember that was the one where an uncle bribed his nephew to refrain from drinking and using tobacco until he was 21. In Hamer, the court found that there was consideration. Today, we consider a case called Kirksey versus Kirksey, where the court considered a promise that lacked consideration, in other words, a gratuitous promise. The defendant in Kirksey wrote a letter to the plaintiff, Angelico Kirksey, his widowed sister-in-law after he learned of his brother's death. He wrote, "If you come down and see me, I will let you have a place to raise your family." The plaintiff had been squatting on public land which she could have secured. But after receiving the letter, she abandoned the land and moved her children about 65 miles to live with the defendant. The defendant housed the plaintiff for over two years but then forced her to leave, and the trial court awarded the plaintiff two hundred dollars. But the incident court that we're going to be focusing on, reversed. So the central issue is simple was the defendant's promise supported by consideration? The court's opinion, in this case, is short and sweet. The opinion begins with what is in effect a one-sentence dissent by the authoring judge who is inclined to hold that "The loss in convenience which the plaintiffs sustained in breaking up and moving to the defendants a distance of 60 miles is sufficient consideration to support the promise." The authoring judge whoever is out voted, is outnumbered by the other judges on the court who, "Think that the promise on the part of the defendant was a mere gratuity, and that inaction will not lie for its breach." With that, the court reverses the lower court's opinion in just three sentences and rules for the defendant. When we discussed Hamer vs Sidway, we concluded that the nephew's agreement to give up his legal right to engage in certain vices counted as a legal detriment, as consideration, because it was illegal detriment, and a detriment to the promisor counts as consideration. How about in this case? Was there a detriment to the promisee in Kirksey? Well, yes. She could have continued to squat on the public land and eventually secure it. But instead, she abandoned the property and traveled 60 miles in reliance on her brother-in-law's promise. So, consideration is either a detriment to the promisee or a benefit to the promisor, the plaintiff seems like she should win, right? Well, wrong. Reliance alone is not enough. There must be a bargain, a quid pro quo. You remember that Section 71 of the Restatements Second of Contracts states that, "To constitute consideration, a performance or return promise must be bargained for, a promise for a return promise is bargained for if it's sought by the promisor in exchange for the promise and is given by the promisee in exchange for that promise." So, was there a bargain for exchange in Kirksey versus Kirksey? No. At least the court, which called the promise a mere gratuity, not just a gratuity but a mere gratuity, didn't seem to think so. Then again, it can be difficult to distinguish a conditional promise from a bargain for a promise. For another example, imagine this offer is made, if you come to my house, you can play with my dog. Is the promisor bargaining with you to persuade you to visit or has the promisor simply saying, "My dog is here. So if you happen to stop by, you can play with it." The latter is a gratuitous but conditional gratuitous promise. Often, we need extra facts to figure out whether a particular promise is offering a quid pro quo, or offering a conditional gratuity. Was the sister's conduct in the Kirksey case bargained for? Well, not if it was not sought by the promisor in exchange for the promise. But are we sure that it was not right? What if the promisor is Jewish and it's a myth for him to marry the widow of his brother. Might he be willing to pay for it to come? Generations of law students have wondered about the story of sister Antillico, why did her brother in law invite her to come stay with them? Was the promise purely gratuitous or did he expect to get something out from her, out of her moving closer to him? And why did he later changed his mind and eject her from his property? A 2006 article by William Casto and Val Ricks cast some new light on this question. They found that under a federal law at the time, squatters on federal lands in Alabama and elsewhere, were often unable to obtain a preference on those lands that allowed them to purchase the lands at below market price. But the law only permitted one preference per person. So, if the brother-in-law had already exercised a preference on other land, he may have sought to persuade and Antillico to occupy the land and exercise a preference, buy it at or below market price, and then transfer it back to him. But if this is the story, why was that an Antillico evicted after two years? Castro and Ricks find records indicating that the brother-in-law, in fact, gave joint possession of the property to his son who turned 21 around the time Antillico was ejected. Once he turned 21, the son was now of age unable to exercise the preference himself making Antillico's continued occupancy unnecessary. These added details suggest that maybe Antillico's brother-in-law was, in fact, seeking a quid pro quo. In the lecture following, Hamer vs Sidway, I talked about the case of Ricketts versus Sculthorpe and introduced the doctrine of promissory estoppel. Promissory estoppel, you'll remember allows courts to enforce promises even if there are not contracts because of lack of consideration. In Ricketts, remember her grandfather promised his granddaughter that he would pay her $2,000 plus interest so that she would not have to go to work anymore. The granddaughter quit her job but after the grandfather died, the executor of the grandfather's estate refused to pay the promised $2,000. The court held that the promise was binding because the granddaughter relied on the promise to her detriment, and it'd be inequitable not to enforce it. Remember that Section 90 of the Restatement Second outlines the conditions for promissory estoppel, "A promise which the promisor should reasonably expect to induce action or forbearance on the part of the promisee or a third person and which does induce such action or forbearance is binding if injustice can be avoided only by enforcement of the promise." So, did the brother-in-law's promise in Kirksey meet the requirements of promissory estoppel? Yes. A promisor who promises to give you a place to raise your family should reasonably expect that the promise will induce you to abandon the land you are squatting on and move 65 miles. And in Kirksey, the promise did in fact induce the plaintiff to move. So, why didn't the court enforce the promise? Well, the easy answer is that when Kirksey was decided in 1845, promissory estoppel was not yet a thing in contract law. Remember, Ricketts's recognized as one of the genesis cases with regard to promissory estoppel, and it was not decided until 1898. Further, Kirksey was decided in Alabama and Ricketts was decided in Nebraska. Since law changes over time and can differ from place to place, these factors might simply explain the outcome. But I'm not going to let you off with just the easy answer nor would most law professors. You should also think of if there were other ways that we can distinguish these cases factually to explain the outcome. One possible key difference is that the promisor and Ricketts had passed away, and the available facts suggests that he still intended for the granddaughter to receive the gift. He was the executor of the estate who refused to pay. With this in mind, the question in Ricketts's was arguably less about whether the grandfathers promise should have irrevocably bound him, and more about how the grandfather's estate should be divided among the descendants? Since the grandfather apparently wanted his granddaughter's wish for, his granddaughter to receive this money until his end, the outcome seems justified. But in Kirksey, it was the promisor who decided himself to take back his gratuitous promise. So with the doctrine of estoppel aside, the cases might also be reconciled by a rule that says an individual who makes a gratuitous promise may later revoke or more easily revoke that promise but he must do it himself or make his intention to revoke posthumously clear to the court. Even if both of these cases may come out the same today under Section 90, under this theory of promissory estoppel and I tend to think they would, thinking through the factual differences in the cases is a useful exercise. This is what common law is frequently about, finding potentially relevant factual distinctions in order to reconcile seemingly an reconcilable and different outcomes. A clever lawyer will often find factual distinctions that allow her to argue that her client's situation is more similar to cases with outcomes more favorable and more distinguishable from outcomes that she doesn't like. So, what have we learned? A conditional gratuitous promise does not create a contract, a contract requires a bargain for exchange. So, even if a promise induces the promisee to take or forbear from taking a certain action, the promise will not be an enforceable contract if that action was not sought by the promisor in exchange for his promise.
