Baehr v. Penn-O-Tex Oil Corp

Brief Fact Summary. Kemp was heavily indebted to Defendant. Defendant assisted Kemp in keeping his business going. Plaintiff sought to recover unpaid rent from Kemp. Defendant promised to pay the rent Kemp owed Plaintiff.

Synopsis of Rule of Law. A promise without consideration does not create an enforceable contract.

Facts. Plaintiff leased gasoline filling stations to Kemp. Kemp was purchasing a business and related property Defendant and as a result became heavily indebted to Defendant. Because Kemp became unable to make payments due to Defendant, Kemp assigned Defendant accounts receivable and to become receivable. During this period of time, Defendant received rent paid by filling station operators and other payments made to the business sold to Kemp. At the direction of Kemp, Defendant paid some of the debts of the business. Defendant also placed an agent in the office to run the business.
While in Florida, Plaintiff received a letter from Kemp indicating that Defendant tied up all of Kemp’s assets. Plaintiff called Defendant about payment of rent owed by Kemp. Defendant told Plaintiff that Kemp’s affairs would be straightened out and the rent checks would be sent. After Plaintiff did not hear from Defendant, Plaintiff wrote Defendant a letter to ask what needed to be done to receive the rent checks. Plaintiff also indicated that legal action would be pursued if the rent payments were not received. Defendant sent Plaintiff a letter in response denying responsibility for the rent and stating that Defendant was merely helping Kemp keep the business going.
Plaintiff again called Defendant to request payment of the rent. Defendant indicated that it would be taken care of. The rent still not paid, Plaintiff brought suit after returning from Florida.

Issue. Did Defendant’s promise to pay rent create an enforceable contract?

Held. No. Because there was no consideration, an enforceable contract was not created.
For a promise to be enforceable it must be supported by consideration. The promise must be the result of a bargain or negotiation for consideration to be present. The requirement of consideration is to prevent the enforcement of a promise that is “accidental, casual, or gratuitous.”
Although Defendant made a promise, the court does not find there to be an enforceable contract. Plaintiff argues that agreeing not to sue or to delay bringing suit is sufficient consideration. The Court agrees that this may be consideration, but under these facts, the Court determined that it is not consideration. The Court focuses on the fact that Defendant did not ask Plaintiff to delay in bringing the suit and that it is likely that Plaintiff’s delay was motivated by personal convenience.

Discussion. In the present case, Plaintiff’s offer to delay bringing suit for unpaid rent did not create sufficient consideration to make Defendant’s promise to pay rent an enforceable contract because Defendant did not ask Plaintiff to delay bringing the suit and the delay was likely motivated by personal convenience.