lack of consideration

On March 20, 1869, William E. Story agreed to and with William E. Story, 2d, that if he would refrain from drinking liquor, using tobacco, swearing, and playing cards or billiards for money until he should become 21 years of age then he would at that time pay him the sum of $5,000 for such refraining, to which the nephew agreed. The trial court found that the nephew in all things fully performed his part of said agreement. On the 31st day of January, the nephew wrote to his uncle claiming that according to agreement there was due him $5,000, having lived up to the contract to the letter in every sense of the word. A few days later, on February sixth, the uncle replied. He had the money in the bank the day the nephew was 21 years old that he intended for him, and the nephew should have the money as promised. He did not intend to interfere with this money in any way until he thought the nephew was capable of taking care of it, with the money on interest. The nephew thereafter consented that said money should remain with the uncle in accordance with the terms and conditions of said letter. Afterwards, on the first day of March, 1877, with the knowledge and consent of his uncle, the nephew duly sold, transferred and assigned all his right, title and interest in and to said sum of $5,000 to his wife Libbie H. Story, who thereafter duly sold, transferred and assigned the same to the plaintiff in this action. The Special Term rendered judgment for the plaintiff. The General Term reversed, and the plaintiff appealed to the Court of Appeals.

In 1981 Wisconsin Knife Works, a division of Black & Decker (U.S.), Inc., a Maryland corporation whose headquarters is in Maryland, sought to manufacture spade bits for its parent and therefore needed a supply of spade bit blanks. National Metal Crafters, a division of Keystone Consolidated Industries, Inc., a Delaware corporation with its principal place of business in Illinois, agreed to supply the blanks. Wisconsin Knife Works issued six purchase orders, each containing printed conditions stating that no modification of the contract would be binding on the buyer unless made in writing and signed by the buyer's authorized representative. National Metal Crafters acknowledged the first two purchase orders, placed August 21, 1981, by letters listing delivery dates; Wisconsin Knife Works inserted those dates into the orders. The remaining four orders, placed September 10, 1981, were accepted by performance after National Metal Crafters supplied oral delivery dates that Wisconsin Knife Works wrote into the forms. All deliveries were due in October and November 1981. National Metal Crafters missed the scheduled delivery dates. Wisconsin Knife Works did not cancel the contract or seek damages for delay; instead, on July 1, 1982, it issued a new set of purchase orders that were later rescinded. By December 1982 National Metal Crafters was producing adequate quantities of blanks, yet only 144,000 of the more than 281,000 blanks ordered had been delivered when Wisconsin Knife Works notified National Metal Crafters on January 13, 1983, that the contract was terminated. Wisconsin Knife Works sued National Metal Crafters in federal district court for breach of the delivery terms. National Metal Crafters counterclaimed for damages, including $30,000 stipulated as the amount owed for breach of a separate oral agreement concerning expenses of maintaining machinery used to fulfill the contract. The district court held that a contract existed. It submitted to the jury the question whether the contract had been modified. The jury found modification and no breach, resulting in dismissal of the complaint and judgment for National Metal Crafters on the counterclaim. Wisconsin Knife Works appealed to the United States Court of Appeals for the Seventh Circuit. The court first examined whether diversity jurisdiction existed, noting that the complaint alleged the plaintiff's corporate parent was a Maryland citizen but failed to state its principal place of business. The record and argument confirmed the headquarters was in Maryland.

On July 28, 1955, plaintiff, a licensed general contractor, was preparing a bid on the Monte Vista School Job in the Lancaster school district with bids due before 8 p.m. It was customary in that area for general contractors to receive the bids of subcontractors by telephone on the day set for bidding and to rely on them in computing their own bids. Plaintiff's secretary received between 50 and 75 subcontractors’ bids by telephone that day and recorded them on special forms for plaintiff to post on a master cost sheet. Late in the afternoon, defendant's estimator telephoned and submitted a bid of $7,131.60 for the paving work according to the plans and specifications. Plaintiff listened to the bid over an extension telephone and posted it on the master sheet, where it was the lowest bid for the paving. Plaintiff computed his own bid of $317,385 accordingly, submitted it naming defendant as the subcontractor for the paving, and was awarded the contract when his bid proved the lowest. The next morning, plaintiff stopped at defendant's office and was told by defendant's construction engineer that they had made a mistake in their bid and could not do the work for the price bid. Plaintiff informed the engineer that he expected defendant to carry through with the original bid since he had used it in compiling his bid. Defendant subsequently refused to perform the paving work for less than $15,000. Plaintiff obtained figures from other subcontractors. After several months, he engaged L & H Paving Company to do the work for $10,948.60. The trial court found that defendant made a definite offer to do the paving for $7,131.60 and that plaintiff relied on the bid in computing his own bid and naming defendant as the subcontractor. It entered judgment for plaintiff in the amount of $3,817, the difference between defendant's bid and the cost of the paving to plaintiff, and defendant appealed from that judgment.