Langer v. Superior Steel Corp.
No reporter information provided (1932)
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Rule of Law:
A promise is an enforceable contract, rather than a gratuitous gift, if the promisor requests and receives a benefit in exchange, such as the promisee's forbearance from an action they have a legal right to undertake. Alternatively, a promise may be enforced under the doctrine of promissory estoppel if the promisee incurs a definite and substantial detriment in reliance on the promise.
Facts:
- William F. Langer was the superintendent of the annealing department for Superior Steel Corporation.
- On August 31, 1927, upon Langer's retirement, the president of Superior Steel sent him a letter.
- The letter commended Langer for his long service and promised him a pension of $100 per month for the rest of his life.
- This promise was conditioned on Langer preserving his loyalty to the company and not being employed in any competitive occupation.
- Superior Steel paid the $100 monthly pension to Langer for approximately four years.
- After four years, Superior Steel notified Langer that it would no longer continue the payments.
Procedural Posture:
- William F. Langer filed a lawsuit for breach of contract against Superior Steel Corporation in a Pennsylvania trial court.
- Superior Steel Corporation filed a statutory demurrer (a responsive pleading raising questions of law), arguing the promise was not an enforceable contract.
- The trial court sustained the questions of law raised by the defendant and entered judgment in favor of Superior Steel Corporation.
- William F. Langer, as appellant, appealed the trial court's judgment to the Superior Court of Pennsylvania.
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Issue:
Does a company's promise to pay a lifetime pension, conditioned on the retiree's forbearance from working for a competitor, constitute an enforceable contract rather than a gratuitous promise?
Opinions:
Majority - Baldrige, J.
Yes. A company's promise to pay a lifetime pension conditioned on the retiree's forbearance from working for a competitor constitutes an enforceable contract. The court reasoned that the condition was not merely a prerequisite for a gift, but was a benefit requested by the promisor, Superior Steel. It was advantageous for the company to prevent a longtime superintendent with intimate knowledge of its methods from being employed by a competitor. Langer’s compliance with this condition—refraining from doing something he had a right to do—constituted a legal detriment and thus valid consideration. Alternatively, the court found the promise enforceable under the doctrine of promissory estoppel (Restatement of Contracts § 90), as Superior Steel should have reasonably expected its promise to induce Langer to refrain from seeking other employment, he did so in reliance on the promise, and injustice could only be avoided by enforcing it.
Analysis:
This case is a classic illustration of the distinction between a conditional gratuitous promise and a bargained-for exchange that constitutes a valid contract. It establishes that a condition attached to a promise serves as consideration if it benefits the promisor, thereby forming an enforceable agreement. The court's dual-grounded holding, relying on both traditional consideration and the modern doctrine of promissory estoppel, was significant. It broadened the scope of enforceable promises by affirming that even without a formal bargain, a promise that induces substantial and definite reliance may be binding to prevent injustice.
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