OTIS F. WOOD v. LUCY, LADY DUFF-GORDON,
222 N.Y. 88; 118 N.E. 214; 1917 N.Y. LEXIS 818

Fact: Lady Duff-Gordon was a fashion guru and hired Wood’s agency to have the exclusive right to her endorsement and fashion design. Lady Duff-Gordon was to handle business for Wood and in return, Lady Duff-Gordon was to receive one half of all the income. Lady Duff-Gordon placed her endorsement on fabrics without the knowledge of Wood and withheld the profits from those fabrics.

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

Rule: Phoenix Hermetic Co. v. Filtrate Mfg. Co., 164 App. Div. 424; the acceptance of the exclusive agency was an assumption of its duties

Analysis: The circumstances supported a promise by implication that Wood 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. Additionally, the one-half profit arrangement was a promise to use all of his efforts in order that the contract would have value to Wood.

Justice Cardozo looks to the exclusive privilege given to Wood and that acceptance thereof was an assumption of the duties to place and market the designs. With Wood’s implied efforts to assume those duties, neither party could effectively make money. Therefore, the court held it was clear from the terms and recitals and duties under the contract that both parties intended to do what was reasonably necessary to make it a success so that there would be profit to divide. Wood’s promise to pay Lady Duff-Gordon ½ of the profit and revenue resulting from the exclusive agency and to render account demonstrated that he held some obligations under the contract, and there was a promise to use reasonable efforts to bring profits and revenue into existence.

Holding: Judgment reversed

Conclusion: The court held that an implied promise is sufficient consideration.