Brief Fact Summary.
Plaintiff sued Defendant for breach of contract after Defendant informed Plaintiff that it would not fulfill the order Plaintiff placed pursuant to their amended contract. The trial court ruled in favor of Plaintiff and awarded it $4,000,000.00 in damages.
Synopsis of Rule of Law.
An optional promise to perform does not constitute consideration.
An illusory promise does not constitute consideration for the other promise, and thus the contract is unenforceable against either party.View Full Point of Law
As a subsidiary of Herman Miller, Inc. (Herman Miller), Office Pavilion S. Florida, Inc. (Defendant) distributes Herman Miller office supplies and furniture. ASAL Products, Inc. (Plaintiff) is an office supply company that sought to resell Herman Miller keyboards. Plaintiff negotiated a contract for keyboards with Gary Kemp, Defendant’s sales manager. The contract specified that Defendant would provide within thirty days as many keyboards as Plaintiff ordered, up to a maximum of 2,000 orders per month. Plaintiff was required to order at least 1,000 units per year. The unit prices were set forth in a separate writing. After the contract had been executed, Plaintiff sought to amend the contract to include the sale of Herman Miller chairs. By a letter drafted by Kemp and forwarded to Plaintiff, the parties agreed that the terms and conditions of the contract would govern the sale of the chairs, except for the delivery and quantity terms. The letter specified that Defendant would supply Plantiff with chairs within established lead times. The parties later executed an addendum that listed the price structure for the chairs. Plaintiff later ordered 2,480 chairs. Kemp informed Plaintiff that Defendant would not fulfill the order. Plaintiff sued Defendant for breach of contract. The trial court ruled in favor of ASAL and awarded it $4,000,000.00 in damages.
Whether an optional promise to perform constitutes consideration.
No. The trial court’s ruling is reversed and the judgment is directed in favor of Defendant. An optional promise to perform does not constitute consideration.
A modification to a contract is not enforceable unless supported by consideration. If one of the parties’ promises under the contract is illusory, in that the party’s performance is optional, then such a promise does not constitute consideration. Here, Defendant agreed to sell to Plaintiff as many chairs as it ordered. The contract did not require Plaintiff to purchase any chairs at all. Thus, Plaintiff’s promise was illusory and the contract with regards to the sale of the chairs is unenforceable. The contract is further unenforceable because the Florida statute of frauds requires that contracts for the sale of goods over $500.00 be in writing and specify the quantity of goods. Here, the chair contract does not have a quantity term; therefore the contract is unenforceable as to the chair agreement.