Contracts II, Pages 801–804

Wood v. Lucy, Lady Duff-Gordon

Court of Appeals of New York, December 4, 1917

Facts:

Defendant, a fashion designer, hired plaintiff to market her designs. Plaintiff was to have the exclusive right to sell her designs and to license them to manufacturers, while she was to have one-half of "all profits and revenues" from any of these contracts. This was to last on a yearly basis unless terminated by 90 days' notice.

Defendant then placed her endorsement on fabrics, dresses, and millinery without plaintiff's knowledge and withheld the profits. Plaintiff sues for damages.

Issue:

Did defendant and plaintiff have a sufficiently complete contract?

Defendant's Argument:

The agreement of employment does not have the elements of a contract, so she did not bind herself to anything.

Reasoning:

  • The contract mentions how well-suited plaintiff's business is to the endorsements, implied that it will be used for this purpose. Defendant's only payment for giving plaintiff this exclusive right is her one-half of the profits. If plaintiff did not make an effort, defendant could not get anything in return. The transaction would be pointless if such a term was not implied.

  • Plaintiff promised that he would account the money monthly and that he would take out the necessary copyrights and trademarks to protect the rights. These would also be pointless promises if defendant did not promise to make an effort to market the endorsements.

Holding:

While the agreement does not say that defendant will use reasonable efforts to place the endorsements and market her designs, such a term is implied. Appellate Division reversed; Special Term affirmed with costs.

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