1. Was Dr. Dohrmann correct in asserting that it is improper for a court to consider the...
Question:
1. Was Dr. Dohrmann correct in asserting that it is improper for a court to consider the relative value or adequacy of the consideration?
2. Read Section 14-1e on Illusory promises. Was the consideration in the case illusory?
Dr. George Dohrmann made a contract with his very elderly childless neighbor, Mrs. Virginia Rogers wherein she agreed to transfer to Dr. Dohrmann upon her death her valuable condominium and its contents and $4,000,000 in cash in exchange for Dohrmann incorporating the name of Rogers into the names of his two children to help perpetuate the Rogers’ names after her death. Dr. Dohrmann performed by taking the legal action necessary to add the Rogers name into the legal names of his two boys. From a judgment against Dohrmann on his breach of contract action against the Rogers estate, he appealed.
JUDICIAL OPINION
SMITH, J.… [T]he sole consideration Dohrmann agreed to give in exchange for over $5.5 million in assets was to add Rogers as an additional middle name to his sons’ names. According to the plain language of the contract, the addition of ‘Rogers’ to the boys’ names was of value to Mrs. Rogers because it would help the Rogers name to continue after Mrs. Rogers’ death. We address that consideration here. We agree with the Estate that Mrs. Rogers did not gain much by the addition of the Rogers name to the boys’ middle names. The stated purpose of adding the name was to “help[ ] the Rogers name to continue after [her] death.” However, Dohrmann did not change the boys’ surnames to Rogers, nor even exchange their middle names for Rogers. Rather, he merely added the name Rogers as one of two middle names for George IV and one of three middle names for Geoffrey. This can hardly be said to perpetuate the Rogers name after Mrs. Rogers’ death.
We note here Dohrmann acknowledges it is appropriate for a court to consider whether consideration was provided in a contract, but argues that it is improper for a court to consider the relative value or adequacy of the consideration. He states: “a court may examine the consideration exchanged for several purposes, none of which, however, includes determining and/or weighing the relative value of adequacy of legal consideration exchanged.” We disagree, as, in cases like the one at bar where the consideration provided is so grossly inadequate as to shock the conscience, a court may examine the adequacy of the consideration. See, e.g., Bonner v. Westbound Records, Inc., 76 Ill. App.3d 736, 743, 31 Ill. Dec. 926, 394 N.E.2d 1303 (1979) (“It is not the function of either the circuit court or [the appellate] court to review the amount of the consideration which passed to decide whether either party made a bad bargain [Citations] unless the amount is so grossly inadequate as to shock the conscience of the court.” (Emphasis added)). The contract is brief and makes no provision for when or even if the boys must actually use the name Rogers. It appears from the record before us that the boys have used the name only intermittently. Moreover, there is nothing in the contract to prevent the boys from legally removing Rogers as a middle name, particularly because they, as minors, were not parties to the contract. Where the consideration for a contract is illusory, the contract will be invalidated for gross inadequacy of consideration. See Mimica, 250 Ill. App.3d at 432, 190 Ill. Dec. 67, 620 N.E.2d 1328. Although the children allegedly took the Rogers name as their own in order to perpetuate the Rogers name after Mrs. Rogers’ death, enforcing that obligation is a legal impossibility. Accordingly, the consideration to this contract is illusory.…
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Business Law Principles for Today's Commercial Environment
ISBN: 978-1305575158
5th edition
Authors: David P. Twomey, Marianne M. Jennings, Stephanie M Greene