University:
University of California, Berkeley
Course:
Law 200.2 | Civil Procedure for LL.M.Students
Academic year:

2022
Views:

251

Pages:

1
Author:

Trevon Bernard

William F. Langer v. Superior Steel Corp. Superior Court of Pennsylvania, 1932 Pa.Super 579 Summary: The President of Superior Steel Corp sent Mr. Langer a letter upon his retirement stating that the company would provide him with a pension of $100 per month as long as Mr. Langer (1) lived, (2) preserved his attitude of loyalty to the company and its officers, and (3) was not employed in any competitive occupation. Superior Steele made these payments to Mr. Langer for four years, and then informed him they would no longer be continuing them. Procedural History: Question/Outcome/Rationale: Does the letter from Superior Steel Corp constitute a gratuitous promise or an enforceable contract? Enforceable contract. “A test of good consideration is whether the promise, at the instance of the promisor, has done, forborne, or undertaken to do anything real, or whether he has suffered any detriment or whether in return for the promise he as done something that he was not bound to do or has promised to do some act or has abstained from doing something….. Mr. Langer refrained from seeking employment with any competitive company, complying with the terms of the agreement. But the court says, well, okay, but it’s still kind of hard to determine if this was a gratuitous promise or consideration. So they look at “whether the happening of the condition will be a benefit to the promisor.” And the court finds that, indeed, it is. Because he has so much valuable knowledge of the inner workings of the company, it would be a detriment if he was employed at their competitors. “By receiving the monthly payments, he impliedly accepted the conditions imposed and was thus restrained from doing that which he had a right to do. [Promissory estoppel] This was a sufficient consideration to support a contract.” Held. The letter is an enforceable contract because it was a result of a bargained for exchange. Consideration was present by the Plaintiff refraining from working for a competitor in exchange for the payment of $100 per month. Likewise, the company received a benefit by barring its former skilled employee to work for its competition. This differs from Kirksey v. Kirksey because there was benefit derived by the promisor. The contract is also enforceable on a theory of promissory estoppel. Here, the promisor should reasonably expect the promise to “induce action or forbearance of a definite and substantial character.” Key Takeaway/Discussion. The court looks at both parties to the transaction and finds that both parties gained a benefit in entering the contract. Therefore, the existence of a bargained for exchange makes this agreement enforceable rather that gratuitous. This also highlights that a bargain doesn’t need to be the only reason for making a promise, but if it constitutes a reason for making a promise, that is consideration!