Yes, it's a real contract because his promise to try hard was clearly implied. The court said that the law isn't about getting every single word perfect anymore. When Lucy gave Wood the exclusive right to make money for her, it only makes sense that he was promising to actually try. She was depending on him, and her only way to get paid was if he generated profits. The whole deal would be pointless otherwise. The contract was 'instinct with an obligation,' meaning you can just tell from the setup that he had a duty to work on her behalf.

Yes, Mr. Wood had to try to sell Lady Duff-Gordon's designs, even though the contract didn't say so clearly. I think this makes sense because she gave him the only right to sell her stuff for at least a year. By taking this job, he agreed to try to make money from it, because that's the only way she would get paid under the deal. The contract has clues that show both sides wanted the deal to succeed in business. Mr. Wood promised to share profits and give monthly reports, so he must have promised to work to make those profits happen in the first place. The lower court got it wrong, so we're fixing that.

Yes, Mr. Wood had to try to sell Lady Duff-Gordon's designs, even though the contract didn't say so clearly. This makes sense because she gave him the only right to sell her stuff for at least a year. By taking this job, he agreed to try to make money from it, because that's the only way she would get paid under the deal. The contract has clues that show both sides wanted the deal to succeed in business. Mr. Wood promised to share profits and give monthly reports, so he must have promised to work to make those profits happen in the first place. The lower court got it wrong, so we're fixing that.

We don't agree with the main decision of the court. The main decision says that even though the contract didn't say it, Wood had to really try to sell Lady Duff-Gordon's designs because they had an exclusive deal. We think that's not right because the contract doesn’t clearly say Wood has to do that. Just because Wood got the exclusive right to sell her stuff doesn't mean he promised to work hard at it. The contract should say clearly what everyone is supposed to do, and in this case, it doesn’t. The majority thinks the contract kind of hints at this promise, but we think that's stretching the words too far. Since the contract doesn’t make it clear, we shouldn’t just assume Wood had these duties. We think the earlier decision that didn’t make Wood responsible for this should stand.

<?xml version="1.0" encoding="utf-8"?> <opinion type="majority"> <author id="b144-5"> Cardozo, J. </author> The defendant styles herself “ a creator of fashions.” Her favor helps a sale. Manufacturers of dresses, millinery and like articles are glad to pay for a certificate of her approval. The things which she designs, fabrics, parasols and what not, have a new value in the public mind when issued in her name. She employed the plaintiff to help her to turn this vogue into money. He was to have the exclusive right, subject always to her approval, to place her indorsements' on the designs of others. He was also to have the exclusive right to place her own designs on sale, or to license others to market them. In return, she was to have one-half of “ all profits and revenues ” derived from any contracts he might make. The exclusive right was to last at least one year from April 1, 1915, and thereafter from year to year unless terminated by notice of ninety days. The plaintiff says that he kept the contract on his part, and that the defendant broke it. ' She placed her indorsement on fabrics, dresses and millinery without his knowledge, and withheld the profits. He sues her for the damages, and the case comes here on demurrer. The agreement of employment is signed by both parties. It has a wealth of recitals. The defendant insists, however, that it lacks the elements of a contract. She says that the plaintiff does not bind himself to anything. It is true that he does not promise in so many words that he will use reasonable efforts to place the defendant’s indorsements and market her designs. *91 We think, however, that such a promise is fairly to be implied. The law has outgrown its primitive stage of formalism when the precise word was the sovereign talisman, and every slip was fatal. It takes a broader view to-day. A promise may be lacking, and yet the whole writing may be “ instinct with an obligation,” imperfectly expressed (Scott, J., in McCall Co. v. Wright, 133 App. Div. 62; Moran v. Standard Oil Co., 211 N. Y. 187, 198). If that is so, there is a contract. The implication of a promise here finds support m\ many circumstances. The defendant gave an exclusive j privilege. She was to have no right for at least a year j to place her own indorsements or market her own designs ¡ except through the agency of the plaintiff. The acceptance of the exclusive agency was an assumption of its duties (Phœnix Hermetic Co. v. Fillrine Mfg. Co., 164 App. Div. 424; W. G. Taylor Co. v. Bannerman, 120 Wis. 189; Mueller v. Bethesda Mineral Spring Co., 88 Mich. 390). We are not to suppose that one party was to be placed at' the mercy of the other (Hearn v. Stevens &amp; Bro., 111 App. Div. 101, 106; Russell v. Allerton, 108 N. Y. 288). Many other terms of the agreement point the same way. We are told at the outset by way of recital that “ the said Otis F. Wood possesses a business organization adapted to the placing of such indorsements as the said Lucy, Lady Duff-Gordon has approved.” The implication is that the plaintiff’s business organization will be used for the purpose for which it is adapted. But the terms of the defendant’s compensation are even more significant. Her sole compensation for the grant of an exclusive agency is to be one-half of all the profits resulting from the plaintiff’s efforts. Unless he gave his efforts, she could never get anything. Without an implied promise, the transaction cannot have such business “ efficacy as both parties must have intended that at all events it should have ” (Bowen, L. J., in The Moorcock, 14 P. D. 64, *92 68). But the contract does not stop there. The plaintiff goes on to promise that he will account monthly for all moneys received by him, and that he will take out all such patents and copyrights and trademarks as may in his judgment be necessary to protect the rights and articles affected by the agreement. It is true, of course, as the Appellate Division has said, that if he was under no duty to try to market designs or to place certificates of indorsement, his promise to account for profits or take out copyrights would be valueless. But in determining the intention of the parties, the promise has a value. It helps to enforce the conclusion that the plaintiff had some duties. His promise to pay the defendant one-half of the profits and revenues resulting from the exclusive agency and to render accounts monthly, was a promise to use reasonable efforts to bring profits and revenues into existence. For this conclusion, the authorities are ample (Wilson v. Mechanical Orguinette Co., 170 N. Y. 542; Phœnix Hermetic Co. v. Filtrine Mfg. Co., supra; Jacquin v. Boutard, 89 Hun, 437; 157 N. Y. 686; Moran v. Standard Oil Co., supra; City of N. Y. v. Paoli, 202 N. Y. 18; M’Intyre v. Belcher, 14 C. B. [N. S.] 654; Devonald v. Rosser &amp; Sons, 1906, 2 K. B. 728; W. G. Taylor Co. v. Bannerman, supra; Mueller v. Bethesda Mineral Spring Co., supra; Baker Transfer Co. v. Merchants’ R. &amp; I. Mfg. Co., 1 App. Div. 507). The judgment of the Appellate Division should be reversed, and the order of the Special Term affirmed, with costs in the Appellate Division and in this court. Cuddeback, McLaughlin and Andrews, JJ., concur; Hiscock, Ch. J., Chase and Crane, JJ., dissent. Judgment reversed, etc. </opinion>

Yes, a promise to use reasonable efforts is fairly implied in the agreement, making it an enforceable contract. The law has moved beyond a rigid formalism where the exact words are paramount; a promise can be implied if the entire document is 'instinct with an obligation.' The acceptance of an exclusive agency implies an assumption of its duties, as the court will not assume one party was intended to be at the mercy of the other. Lady Duff-Gordon's sole compensation was a share of the profits generated by Wood's efforts; without his efforts, she would receive nothing, which would deprive the transaction of the business efficacy both parties must have intended. Furthermore, Wood's express promises to account for profits and secure intellectual property rights would be valueless without an underlying duty to try to generate those profits in the first place, thus reinforcing the conclusion that he had a duty to use reasonable efforts.

Yes, there is an implied promise to use reasonable efforts in this exclusive rights contract. I find that such a promise is fairly implied because Lady Duff-Gordon gave Wood an exclusive privilege to market her designs for at least a year. By accepting this exclusive agency, Wood assumed a duty to make reasonable efforts to generate profits, because that is the only way Lady Duff-Gordon would receive any compensation under the agreement. Several other terms of the contract support this implication, such as the mention of Wood's business organization being adapted for this purpose, and his promise to account for revenues and secure necessary patents and trademarks. A promise to pay half the profits and render monthly accounts amounts to a promise to use reasonable efforts to bring such profits into existence. The judgment of the Appellate Division is reversed.

Yes, an exclusive rights contract contains an implied promise to use reasonable efforts even when the contract does not explicitly state such a duty. Such a promise is fairly implied because Lady Duff-Gordon gave Wood an exclusive privilege to market her designs for at least a year. By accepting this exclusive agency, Wood assumed a duty to make reasonable efforts to generate profits, because that is the only way Lady Duff-Gordon would receive any compensation under the agreement. Several other terms of the contract support this implication, such as the mention of Wood's business organization being adapted for this purpose, and his promise to account for revenues and secure necessary patents and trademarks. A promise to pay half the profits and render monthly accounts amounts to a promise to use reasonable efforts to bring such profits into existence. The judgment of the Appellate Division is reversed.

We respectfully dissent from the majority's decision. The majority holds that an implied promise to use reasonable efforts can be inferred from the exclusive rights contract between Lady Duff-Gordon and Wood. However, we find that the contract's language and the circumstances under which it was executed do not sufficiently establish such an implication. The contract lacks explicit commitment from Wood to use reasonable efforts to market Lady Duff-Gordon's designs, which is a critical element for imposing such a duty. While the majority relies on the exclusivity of the rights granted and the structure of compensation to imply this duty, we believe this interpretation extends beyond the clear intent of the parties. The principle that a contract must be 'instinct with an obligation' should not be applied so broadly as to create terms not expressly agreed upon by the parties. Because the contract does not explicitly bind Wood to any specific level of effort, imposing such a duty retrospectively alters the fundamental terms of the agreement. Therefore, we would affirm the judgment of the Appellate Division.

Wood v. Lucy, Lady Duff-Gordon

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