Wood v. Lucy

Wood v. Lucy

118 N.E. 214 (1917)

(Consideration, Implied Promise S.9)

Facts: Lucy, a fashion designer, employed Wood who was to have an exclusive right to market her endorsements on products. In return, she was to have one-half of all profits or revenues that are derived from any contracts he might take. Wood accused Lucy of placing her endorsements on some brands without his knowledge and withheld the profits.

Issues:

1) Whether there was implied term in contract that Wood will use reasonable efforts to market Lucy’s endorsements?

2) Whether there was any valid consideration provided by Wood to Lucy?

Held (Cardozo J.):

1)    Yes, such an implied term is to be read in contract because, firstly, Lucy gave an exclusive privilege to Wood to market her own endorsements, and the acceptance of this exclusive agency was the assumption of duty to use reasonable efforts to market her endorsements. Secondly, she is deriving one half of all profits resulting from Wood’s efforts. Unless he gives such efforts, she could never get anything. Hence, without the implied promise, the contract will be ripped of its essential “business efficacy” as intended by the parties while forming such contract. Therefore it was intended by parties that Wood will use reasonable efforts to bring profits into existence.

2)    The implied promise on part of Wood to use reasonable efforts to market Lucy’s endorsements, served as valid consideration for the impugned contract.

Author: Vishrut Kansal (National University of Juridical Sciences, Kolkata)