Harrington v. Harrington
1985 N.D. LEXIS 288, 365 N.W.2d 552 (1985)
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Rule of Law:
A promise constitutes valid consideration, and is not illusory, if the promisor incurs a legal detriment by giving up a legal right they were otherwise privileged to retain. The potential for future events to diminish the value of the promise does not negate the existence of consideration, but rather goes to its adequacy, which courts generally will not evaluate.
Facts:
- Nancy Harrington and Gerald Harrington divorced in 1981, with Gerald receiving the family farm and owing Nancy $150,000, secured by two mortgages she held on the farm.
- Gerald faced financial difficulties and was unable to obtain refinancing for his farm operations because Nancy's mortgages encumbered the property.
- Gerald asked Nancy to satisfy the mortgages to enable him to secure new financing.
- Nancy, concerned that their son Ronn would not inherit the farm because Gerald had remarried, agreed to satisfy the mortgages if Gerald would execute a will leaving the farm to Ronn.
- On December 30, 1981, Nancy and Gerald signed a formal agreement: she would satisfy the mortgages and release his debt, and in return, he would name Ronn as the sole devisee of the farm in his will.
- The agreement permitted Gerald to encumber or convey parts of the land for farming purposes if 'future economic exigencies' required, and it gave Ronn a first option to purchase any land sold.
- On April 1, 1982, Gerald executed a holographic will devising the farm to Ronn in accordance with their agreement.
- Nancy subsequently refused to execute the satisfactions of the two mortgages.
Procedural Posture:
- Nancy Harrington filed a mortgage foreclosure action against Gerald Harrington in the district court of Griggs County.
- In his answer, Gerald requested that the court order Nancy to provide a satisfaction of the mortgages based on their December 30, 1981 agreement.
- The district court, as the court of first instance, concluded the agreement was a valid contract.
- The district court dismissed Nancy's complaint and ordered her to execute the mortgage satisfactions.
- Nancy Harrington appealed the district court's judgment to the state's highest court.
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Issue:
Does an agreement in which a party promises to devise property to a third person constitute an unenforceable illusory contract for lack of consideration if the promisor retains the right to encumber or convey the land and the devise is subject to a surviving spouse's potential elective share?
Opinions:
Majority - Gierke, Justice
No, the agreement is a valid and enforceable contract, not an illusory one lacking consideration. A promise is supported by consideration if the promisor gives up a legal right they were privileged to retain. Here, Gerald surrendered his legal right to devise his farm to whomever he chose. This relinquishment constitutes a legal detriment and is sufficient consideration. The fact that future events—such as Gerald encumbering the land, selling parts of it, or his new wife taking an elective share—might reduce the value of Ronn's inheritance goes to the adequacy of the consideration, not its existence. Courts will not inquire into the adequacy of consideration unless it is so gross as to shock the conscience, which is not the case here. Therefore, the contract is valid and Nancy is obligated to perform her part of the bargain.
Analysis:
This case reinforces the fundamental contract law principle that courts do not assess the adequacy of consideration, only its existence. The decision clarifies the distinction between an illusory promise, which involves no real commitment, and a promise whose ultimate value is uncertain. By holding that giving up the legal right to freely dispose of one's property is sufficient detriment to constitute consideration, the court sets a precedent that a promise is not illusory merely because it is subject to conditions or potential diminishment by future events. This ruling solidifies the enforceability of contracts to make a will and limits the ability of a party to escape a bargain by later claiming the other's promise was 'worthless'.
