Greiner v Greiner

US Contract Law

Greiner v Greiner
Image: ‘Plaza Lights, Kansas City’ by Thomas Kinkade

Inducement of consideration on the part of a promisee to a contract, whether written or oral, is an action that while not seemingly of benefit to the promisor, requires completion of the gesture by lawful means should natural justice be seen to be done.

In 1926, the appellant inherited a substantial amount of land from one of her sons, after which she aimed to use it to make amends for her late husband’s death, whose own will had disinherited four of his children, while the remaining four became beneficiaries to portions of his estate.

By way of reparation, the appellant sought the counsel of a number of those children, while on a number of occasions, explaining that she intended for the respondent to relocate from his home in Logan County, to a plot estimated at around 80-97 acres in size. This became problematic for the respondent as he was indebted by way of mortgage and could not just ‘up sticks’ and move, at which point the appellant took steps to reassign the mortgage to herself, so as to allow the respondent to take up residence on the land set aside for him.

This was duly executed until around a year later, when the respondent was served with a notice to quit by one of his brothers, whereupon he sought remedy by way of a conveyance from the appellant to support his right to title. Given that the appellant was illiterate, it became apparent that she had not taken the steps needed to complete such a disposition, but had instead relied upon her own insistence that she would bequeath him the land by way of a will, which was yet to be drafted.

When heard at the District Court, the judge ruled in favour of the respondent, whereupon the appellant contested it within the Supreme Court of Kansas. Here, reference was made to s.32 of the Restatement Law of Contracts which reads:

“In case of doubt an offer is interpreted as inviting the offeree to accept either by promising to perform what the offer requests or by rendering the performance, as the offeree chooses.”

While s.90 of the same document reads:

“A promise which the promisor should reasonably expect to induce action or forbearance of a definite and substantial character on the part of the promisee and which does induce such action or forbearance, is binding if injustice can be avoided only by enforcement of the promise.”

Which translated that despite a failure to endorse her intentions through written expression, the appellant had by virtue of her repeated declarations, created an enforceable contract of disposition that by extension had led to the relocation of the respondent on the pretence that title was both implied and ultimately due through either deed or testamentary powers. It was this irreversible fact that led the Court to uphold the previous decision and dismiss the appeal outright on grounds that financial remedy would not be sufficient to the cause in hand.

Key Citations

“A promise for breach of which the law gives a remedy, or recognizes as creating a legal duty, is a contract. The promise need not be in any crystallized form of words: “I promise,” “I agree,” etc. Ritual scrupulousness is not required and, generally, any manifestation, by words or conduct or both, which the promisee is justified in understanding as an expression of intention to make a promise, is sufficient.”

Alaska Packers Association v Domenico

US Contract Law

Alaska Packers Association v Domenico
Image: ‘Fishing Boats’ by Dusan Djukaric

The legal enforcement of a binding contract requires consideration to both bargaining parties, and so on this occasion, the demands of an established labour force prove their undoing when overlooking the fundamental principles of any written agreement.

In 1900, a commercial fishing enterprise recruited the services of a number of seamen and deck hands for the purposes of catching salmon. Before departing San Francisco, the now appellants accepted and signed individual employment contracts, on grounds that they would be paid between $50-$60 per person, with two additional cents for every salmon caught.

After docking in Alaska a month later, the men ceased working and demanded that the ship’s superintendent pay them $100 each, or risk losing them entirely. With no means with which to replace them, and after failing to placate their objections, the superintendent agreed to pay the increased sums, after which duplicate contracts were printed and signed before the local Shipping Commissioner, despite the superintendent stressing that he was unauthorised to endorse the new contracts.

Upon return to San Francisco, the appellants demanded their increased payments, however the respondent employers refused to acknowledge anything other than the original contract, and so litigation was bought against them on grounds that the fishing nets supplied were defective, and therefore counter to their chances of earning extra money, as per the original agreement.

The Northern California District Court took issue with the principles of the appellants claims, as to provide defective nets would by effect, have reduced the employers profits and subsequent means of operation, therefore it was held that refusal to perform the contract was unlawful, however the court also held that:

Under such circumstances, it would be strange, indeed, if the law would not permit the defendant to waive the damages caused by the libelants’ breach, and enter into the contract sued upon, a contract mutually beneficial to all the parties thereto, in that it gave to the libelants reasonable compensation for their labor, and enabled the defendant to employ to advantage the large capital it had invested in its canning and fishing plant.”

At which point judgment was made in favour of the appellants, despite glaring disparities of fact.

Upon further challenge, the Court of Appeals drew reference to the statements made by the superintendent, and noted that any contract entered into under duress, and without due consideration was, without question, unenforceable, as had been outlined in King v. Railway Co. where the court ruled that:

“No astute reasoning can change the plain fact that the party who refuses to perform, and thereby coerces a promise from the other party to the contract to pay him an increased compensation for doing that which he is legally bound to do, takes an unjustifiable advantage of the necessities of the other party.”

And so therefore:

“There can be no consideration for the promise of the other party, and there is no warrant for inferring that the parties have voluntarily rescinded or modified their contract. The promise cannot be legally enforced, although the other party has completed his contract in reliance upon it.”

Thus it was for this simple and perhaps obvious reason, that the appeal was dismissed and judgment reversed back in favour of the respondents.