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Feinberg v. Pfeiffer Co.

Melissa A. Hale

ProfessorMelissa A. Hale

CaseCast "What you need to know"

CaseCast –  "What you need to know"

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Feinberg v. Pfeiffer Co.
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    Brief Fact Summary. P brings a breach of contract action against D because D refuses to honor a pension plan agreement.

    Synopsis of Rule of Law. Mutuality of obligation requires that consideration for a promise be bargained for and given in exchange for that promise.

    Facts. Feinberg (P) began working for Pfeiffer Co. (D), a manufacturer of pharmaceuticals in 1910, when P was 17 years old. There was no contract between P and D regarding P’s length of employment. P was free to quit and D was free to fire P at any time. In recognition of P’s long and faithful service, D increased P’s salary from $350/month to $400/month. P was also afforded the privilege of retiring from active duty at any time that she may elect and receive retirement payments from D in the amount of $200/month for the remainder of P’s life. P was immediately notified of her salary increase and pension plan. P testified that she had no prior knowledge of the pension plan and that she would have continued to work for D regardless. P did continue to work for D until June 30, 1949 when she retired. Her pension plan was a major factor in her decision to retire. D started paying P $200/month. Several years after her retirement, D notified P that her payments would be reduced to $100 per
    month. P refused to accept the reduced amount. D terminated all payments. P sued for breach of contract. Judgment for P. D appealed.

    Issue. After being notified of her right to a pension plan, does P’s continuation to work for D constitute a valid consideration?

    Held. No. But judgment affirmed for other reasons. See the second part of the opinion at p. 91, Farnsworth Cases and Materials, 6th Edition.
    P’s continuation to work after being notified of the pension plan lacks the mutuality of obligation, which is essential to the validity of a contract. There was no language predicating P’s right to a pension plan upon her continued employment. P made no promise or agreement to continue her employment with D in exchange for D’s promise to pay P her pension plan.

    Discussion. For a consideration to be valid, it must be bargained for and given in exchange for a promise.


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