The famous designer, Lucile, was involved in a case which is very important in contracts law: Wood v. Lucy, Lady Duff-Gordon.
Wood
v.Lucy Duff-Gordon is an important case in the history of
contract law. It is still surprisingly
controversial.
The decision in Wood
v.Lucy Duff-Gordon 222 N.Y. 88 (1917) was
a landmark in contract law. It involved
important rulings in what constitutes consideration and implied promise. Justice Cardozo’s luminously written
judgement is still studied by law students in many countries because the case
set these important precedents and it is cited in many decisions.
Facts
of Wood v. Duff-Gordon
The facts involved an agreement between Lucile
Duff-Gordon, a famous Edwardian designer, and Otis Wood, her manager. Duff-Gordon gave Wood the exclusive right to
market her designs and place her endorsements on the designs of others. He was to be entitled to half of the revenues
that he made from this marketing.
Duff-Gordon made an exclusive agreement with Sears,
Roebuck to have her dresses marketed in the Sears’ mail-order catalogue. This was revolutionary for a designer who
designed haute couture clothes.
Duff-Gordon was far-sighted in selling a ready-to-wear line in Edwardian
times. She didn’t tell Wood about the agreement with Sears or give him any of
the profits.
The
decision of Wood v.Duff-Gordon
The lower courts found for Wood when he sued for
breach of contract. The Supreme Court denied Duff-Gordon’s argument that there
was no valid contract because there was no consideration involved. She argued that Wood had not promised to do
anything or given her anything in the agreement. The Appellate Division reversed this decision, and
Wood appealed. The New York Court of
Appeals found in favour of Wood.
Justice Cardozo wrote in his famous judgement that
there was an ‘agreement instinct with an obligation.’ There was a valid
contract because there were mutual obligations – Duff-Gordon gave Wood
exclusive marketing rights and Wood was entitled to half of the profits of any
business that he completed according to the agreement. Even though Wood had not
expressly promised to do anything, he had agreed to attempt to market
Duff-Gordon’s designs.
Cardozo also found that there was an implied promise
in the agreement. Wood made an implied
promise to use his best efforts to market Lucile Duff-Gordon’s designs and
place endorsements for her. An important factor in this decision was that Wood
had an organization which was capable of doing this. Another factor was that Wood had agreed to
give Duff-Gordon monthly accounts.
Duff-Gordon had an obligation of good faith not to
make marketing contracts with other people for the duration of her contract
with Wood. She had breached this by
entering into a contract with Sears, Roebuck.
Justice Cardozo’s widening of the areas of
consideration and implied promise were controversial because of his alleged
judicial activism, i.e. not sticking to the express terms of the
agreement. He stated that: "the law
has outgrown its primitive stage of formalism when the precise word was the
sovereign talisman...it takes a broader view today." There have been many
essays for and against this decision.
The Pace University Law School even held a Symposium on ‘The Enduring
Legacy of Wood v. Lucy, Lady Duff-Gordon in 2009 attended by leading contracts
scholars and fashion experts from as far away as Australia and England.
Sources
Kauffman, Andrew.
Cardozo, Harvard College, 1998
Today in History: Wood v. Lucy, Lady Duff-Gordon
An Exclusive Licensee's Obligation to
Use Reasonable Efforts in Placing a Product
