Wood v. Lucy, Lady Duff-Gordon

Brief Fact Summary. Defendant was a fashionable woman and designer capable of increasing the sales of certain goods by her endorsement. Defendant entered into an exclusive agreement with Plaintiff allowing him to place her endorsement and market defendant’s designs and keep half of the profits. Plaintiff claimed she broke the contract by placing endorsements without his knowledge and keeping all the profits too herself.

Synopsis of Rule of Law. Mutuality or a return promise may be implied from the circumstances surrounding the contract and the nature of the whole writing.

Facts.
Defendant would design fashions and could also increase sales of the designs of others through her endorsement.
In the agreement, Plaintiff was granted exclusive right to place endorsements and to place Defendant’s own designs for sale. Defendant would retain half the profits and Plaintiff the other half of the profits.  Nothing in the document expressly stated what Wood promised to do.  Plaintiff’s business organization was adapted for the purpose of placing endorsements.

Issue. Whether the contract lacks mutuality because it does not expressly bind or require the Plaintiff to actually place endorsements or market defendant’s designs.

Held. The circumstances supported a promise by implication that Plaintiff would use reasonable efforts to place the endorsements and market the designs. Unless he gave his efforts neither party would gain anything from the contract. Also the one-half profit arrangement was a promise to use all of his efforts in order that the contract would have value to Plaintiff.

Discussion. Justice Cardozo looks to the exclusive privilege given to Plaintiff and that acceptance thereof was an assumption of the duties to place and market the designs. With Plaintiff’s implied efforts to assume those duties, neither party could effectively make money.