Carlisle v. T & R Excavating, Inc.
1997 Ohio App. LEXIS 4629, 704 N.E.2d 39, 123 Ohio App. 3d 277 (1997)
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Rule of Law:
An agreement is not an enforceable contract if it lacks bargained-for consideration. Past consideration or a promise to reimburse a promisor's out-of-pocket costs does not constitute legally sufficient consideration if it was not bargained for as the inducement for the promise.
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 when offered.
- Thomas Carlisle then 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 presented a written proposal to provide all excavation and site work labor and equipment (valued at $40,000) at no cost, with the preschool only being billed for materials at T & R's cost.
- Janis Carlisle signed an 'Acceptance of Proposal' on the same date.
- In December 1992, while contemplating divorce, the couple prepared a document stating that Tom agreed to do the excavation work 'In repayment to Jan for her secretarial services.'
- T & R began performing the excavation work in early 1993 but abandoned the project in late May or early June 1993, after the couple had separated.
- Janis Carlisle subsequently hired other contractors to complete the excavation and site work for the preschool.
Procedural Posture:
- Janis Carlisle and her companies (plaintiffs) sued T & R Excavating Inc. (defendant) in the Medina County Common Pleas Court (trial court) for breach of contract.
- The trial court found that a contract existed and awarded the plaintiffs $35,790.75 in damages.
- T & R Excavating Inc. (appellant) appealed the judgment to the Court of Appeals of Ohio, Ninth Judicial District.
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Issue:
Does an agreement constitute an enforceable contract where one party promises to perform services for free, conditioned on the other party's promise to reimburse material costs, when the promisor's motivation is gratitude for past services or a desire to assist a spouse?
Opinions:
Majority - Dickinson, Presiding Judge.
No. An agreement is not an enforceable contract without bargained-for consideration. A conditional gratuitous promise, such as providing free services on the condition of reimbursement for materials, lacks the necessary consideration to be legally binding. The court reasoned that for a contract to exist, there must be an offer, acceptance, and consideration, which consists of a benefit to the promisor or a detriment to the promisee that is 'bargained for.' Here, there was no evidence that T & R's promise of free labor was induced by Janis Carlisle's promise to pay for materials; rather, the reimbursement was merely a condition of a gift. The court further held that Janis Carlisle's past bookkeeping services constituted 'past consideration,' which is not legally sufficient to support a new promise because it was not given in exchange for that promise. Motivations like love, a desire to help a spouse, or potential sharing in future marital income do not qualify as legal consideration. The court concluded the arrangement was an unenforceable conditional gratuitous promise, not a contract.
Analysis:
This decision provides a clear judicial line between an unenforceable conditional gratuitous promise and a contract supported by consideration. It reinforces the doctrine that consideration must be bargained-for, meaning the promise and the purported consideration must be reciprocal inducements. The case is significant for its application of contract principles within an intra-marital context, demonstrating that familial relationships do not alter the fundamental requirement of a bargain. The ruling solidifies the legal principle that 'past consideration' is no consideration, preventing a party from enforcing a new promise made in recognition of a prior, uncompensated act.
