Plowman v Indian Refining Co

Dispute

Several plaintiff employees of a company brought suit against the company on the basis of a promise that they would be paid a salary for life, consisting of one half of their former salary at retirement. The only condition for receiving continued pay was to come and pick up a check. The arrangement, though without reference to duration, was made on paper as of the date of their retirement, and proceeded for some years before being unilaterally terminated. The general manager denied promising an unlimited duration, though all employees said otherwise.

Rules of law

To be contractually enforceable, a promise must be supported by consideration. The consideration must be an immediate or future benefit; past or executed consideration cannot be bargained for and is self-contradictory. A mere condition for acceptance of a gift does not constitute consideration.

Conclusion

Even on the interpretation of the facts most favorable to the plaintiffs, there was no valid consideration for the promise and therefore there was no contract. The court held “appreciation of past services or pleasure afforded the employer thereby is not a sufficient consideration.”

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