Carlisle v. T & R Excavating, Inc.
704 N.E.2d 39 (1997)
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Rule of Law:
For a promise to be an enforceable contract, it must be supported by bargained-for consideration. A gratuitous promise, even if it is conditional or made in recognition of past services, lacks consideration and is not legally enforceable.
Facts:
- Janis Carlisle and Thomas Carlisle married in 1988; Thomas Carlisle is the sole owner of T & R Excavating, Inc.
- Shortly after their marriage, Janis Carlisle began performing bookkeeping services for T & R Excavating, for which she refused payment.
- Thomas Carlisle then allegedly stated he would, instead, 'do [her] work for [her] on [her] building.'
- In 1992, Janis Carlisle decided to build a preschool, and on September 25, 1992, T & R Excavating submitted a written proposal to provide all labor and equipment at no cost, with Carlisle's company only paying for materials.
- Janis Carlisle signed an acceptance of the proposal on the same day.
- In December 1992, while contemplating divorce, the couple prepared a document stating that in 'repayment' for Janis's past secretarial services, Thomas's company would perform the excavation work.
- T & R Excavating began work in early 1993 but abandoned the project in late May or early June after the couple had separated.
- Janis Carlisle hired other contractors to complete the excavation and site work for the preschool.
Procedural Posture:
- Janis Carlisle, individually and on behalf of her companies, sued T & R Excavating Inc. for breach of contract in the Medina County Common Pleas Court, which is the trial court.
- The trial court found that a contract existed between the parties.
- The trial court awarded the plaintiffs $35,790.75 in damages.
- T & R Excavating Inc. (appellant) appealed the trial court's judgment to this court, an intermediate appellate court.
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Issue:
Does an agreement to provide free labor and equipment for an excavation project, where the promisee only agrees to reimburse the promisor for the cost of materials, constitute an enforceable contract supported by valid consideration?
Opinions:
Majority - Dickinson, Presiding Judge.
No, the agreement does not constitute an enforceable contract because it lacks valid consideration. A contract requires an offer, acceptance, and consideration, which is defined as a bargained-for benefit to the promisor or detriment to the promisee. Here, T & R Excavating's promise to provide free labor was a gratuitous promise motivated by Thomas Carlisle's desire to help his wife, which is a motive, not consideration. Janis Carlisle's promise to reimburse T & R for material costs was merely a condition of this gift, not a bargained-for benefit that induced T & R's promise. Furthermore, Janis's prior bookkeeping services constitute past consideration, which is not legally sufficient to support a new contract, as it was not bargained for in exchange for the promise of excavation work.
Analysis:
This decision provides a clear illustration of the critical distinction between valid consideration and a conditional gratuitous promise, particularly in the context of agreements between parties in a close personal relationship. It reinforces the established legal doctrine that past consideration is not sufficient to form an enforceable contract because it lacks the essential element of a bargained-for exchange. The court's analysis emphasizes that promises motivated by goodwill or gratitude, even if documented in writing, are not legally binding without a genuine, contemporaneous trade of value. This case serves as a key precedent for analyzing intra-family agreements and determining whether they rise to the level of a contract or remain an unenforceable gift.
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