Weavertown Transport Leasing, Inc. v. Moran
834 A.2d 1169, 2003 Pa. Super. 385, 2003 Pa. Super. LEXIS 3686 (2003)
Premium Feature
Subscribe to Lexplug to listen to the Case Podcast.
Rule of Law:
Payment made to a third party does not constitute legally sufficient consideration to form a contract if that third party is merely an incidental beneficiary to the agreement. Furthermore, for a promise to be enforceable under promissory estoppel, the promisee's reliance must involve forbearing from an action of a definite and substantial character.
Facts:
- In July 2000, Daniel Moran began working as a controller for Weavertown Transport Leasing, Inc.
- As a long-time Pittsburgh Steelers season ticket-holder, Moran was offered the opportunity to purchase seven-year licenses for four Club-Level seats at the new Heinz Field for $3,840.
- Moran learned that his employer, Weavertown, wanted to acquire season tickets for client entertainment.
- Moran orally offered to sell the Club-Level seats to Weavertown and to transfer the seat licenses to the company's name when the Steelers organization would permit it.
- Pursuant to this arrangement, Weavertown issued checks directly to the Stadium Building Fund for the license fees and to the Steelers for the face value of the tickets.
- Moran resigned from Weavertown in May 2001 but allowed the company to use the seats for the entire 2001-2002 season and playoffs.
- After the season, Moran refused to transfer the licenses to Weavertown, stating he never intended to do so, and offered to refund the pro-rated value of the license fee.
- Weavertown rejected Moran's offer to refund the fee.
Procedural Posture:
- Weavertown Transport Leasing, Inc. filed an action against Daniel Moran in a Pennsylvania trial court, seeking an order of specific performance for an alleged oral contract.
- The trial court found that an enforceable oral contract existed between the parties.
- The trial court entered an order directing Moran to transfer the seat licenses and any outstanding tickets to Weavertown.
- Moran, as appellant, appealed the trial court's order to the Superior Court of Pennsylvania; Weavertown is the appellee.
Premium Content
Subscribe to Lexplug to view the complete brief
You're viewing a preview with Rule of Law, Facts, and Procedural Posture
Issue:
Does an employee's promise to transfer sports season ticket licenses to his employer constitute an enforceable oral contract when the employer pays the license fees directly to the sports franchise, but the employee receives no direct benefit and the employer forgoes no other substantial opportunity in reliance on the promise?
Opinions:
Majority - Johnson, J.
No. An enforceable oral contract did not exist because the arrangement lacked both valid consideration and grounds for promissory estoppel. A payment to a third party only constitutes consideration if that party is an intended beneficiary of the contract, not merely an incidental one. Here, the Pittsburgh Steelers and the Stadium Building Fund were incidental beneficiaries because the agreement between Moran and Weavertown was not intended to benefit them, and Weavertown had no independent obligation to them. Furthermore, promissory estoppel does not apply because Weavertown failed to prove it relied on Moran's promise to its detriment by giving up any other 'definite and substantial' opportunity to acquire comparable seat licenses.
Analysis:
This decision reinforces the traditional contract requirement of a bargained-for exchange by clarifying the limits of third-party consideration. It establishes that a benefit conferred upon an incidental beneficiary does not satisfy the consideration element between the primary contracting parties. The case also illustrates Pennsylvania's restrictive application of promissory estoppel, requiring a high evidentiary standard for detrimental reliance. This holding cautions parties against relying on informal promises, emphasizing that performance of a condition to receive a gift does not transform a gratuitous promise into an enforceable contract.
Unlock the full brief for Weavertown Transport Leasing, Inc. v. Moran