Brief Fact Summary. The Defendant, Oyler (Defendant), failed to repay debts owed to the Plaintiff, Manwill (Plaintiff), within the statute of limitations (SOL) period. After the statutory period, the Defendant made an oral promise to repay the balance of the debt. Plaintiff sues to enforce the promise.
Synopsis of Rule of Law. Moral obligation cannot operate as consideration with a few limited exceptions. Something of legal benefit or detriment, instead, must be conferred.
Issue. Can a subsequent verbal promise count as consideration?
Held. No. Reversed.
The court adopts the material benefit rule. This rule states, where the promisors have received something from the promisee of value in the form of money or other material benefits, under such circumstances as to create a moral obligation to pay for what they received and later promise to do so, there is consideration for such promise. However, the court says there must be something beyond a bare promise, as of an offered gift or gratuity.
Moral obligation, taken alone, would “practically erode to the vanishing point the necessity for finding a consideration.” There is basically always a moral element to any promise. Plaintiff failed to prove that it was reasonable to suppose that the Plaintiff expected to be compensated when he made the payments on behalf of the Defendant.
The time in which an action can be brought may be extended if the promise is in writing and signed by the party to be charged.
Discussion. The Court has focused on the promisor and the law’s precedent to not inject moral obligation into the law of contracts. If a promisor wants a moral obligation to have binding force, he or she must make it very clear and explicit in order for the court to enforce it.