D told P that he would receive $100/mo. As long as P preserved attitude of loyalty to D and was not employed in any competitive occupation.
D paid for four years until P was notified that D did not intend to pay any longer.
Procedural History:
Lower court found for D.
Reversed on appeal and remanded to lower court.
Lower court found for P.
Highest court in state found for D since person who made promise did not have the legal right to bind the company.
Issues:
Is consideration valid even if the promisee is not bound to the constraints of the agreement?
Is consideration given if the promisee was only restrained from doing that which he had a right to do?
Holding/Rule:
Being constrained from doing something one has a right to do, suffering any detriment, or doing something a one isn't required to do is sufficient consideration, whether there is any actual benefit to the promisor or not.
Just because one party has an option to act inside or outside of the agreement and one side does not, does not preclude consideration.
Reasoning:
It was to the advantage of the D if the P did not work for any other company. P did not work for any other company because of the agreement with D.
By receiving monthly payments, the P accepted the conditions and was constrained from doing what he had a right to do. This was sufficient consideration.
Contract is also enforceable through the theory of promissory estoppel.
P was induced by the promises by D to refrain from seeking other employment. (reliance)
"We do not mean to state that in all cases where a gratuitous promise is made, and one relies upon it, the promisee can recover, but, if a detriment of a definite and substantial character has been incurred by the promisee, then the court may enforce the promise."
