Also known as:rewards · rewarded · rewarding · bounty · prize
Written by attorneys — see sources below.
A payment or benefit of value conferred in return for a service or achievement. The conferral creates an expectation of compensation tied to the performance of the requested act or the supply of information leading to a specific outcome.
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How its tested
Common Examples
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Will Capacity and Reward Promise
Roland Rhodes drafted a will leaving his estate to his niece after she located a long-lost family heirloom. The niece performed the search and recovered the item. A court later assessed whether Roland possessed the required understanding of his property and the disposition when he executed the document containing the reward promise.
Junior Mortgagee and Rent Reward
Rowan Russell, a junior mortgagee, obtained a receiver who collected rents from the mortgaged office building. The receiver first paid taxes and maintenance costs from those rents. The excess was then applied toward the junior obligation as compensation for the diligent pursuit of the receivership.
Rosa Ruiz owned land in State A but lived in State B. State A law limited the period during which alienation of land could be suspended. A court weighed the purpose of that rule and the states' respective relations to the land and parties when deciding whether to apply State A's restriction to a reward offered for locating a buyer.
Power of Appointment and Reward
Renee Rogers held a power of appointment and attempted to exercise it in favor of a creditor who had advanced funds. Although the formal requisites were not fully met, a court applying equitable principles upheld the appointment because the appointee was a creditor and the exercise approximated the donor's prescribed manner.
Collateral Estoppel and Reward
Raphael Rivera sued a company after an earlier SEC action had established certain facts. The court considered whether allowing offensive collateral estoppel would reward a plaintiff who could have joined the prior proceeding, ultimately declining to apply the doctrine because of fairness concerns.
Parklane Hosiery Co. v. Shore439 U.S. 322, 334 (1979)
Parklane Hosiery Company, Inc., and eleven of its officers and directors issued a proxy statement in connection with a merger between Parklane and another corporation. Leo Shore, a stockholder of Parklane, filed a class action on behalf of stockholders in the United States District Court for the Eastern District of New York against Parklane and the individual defendants. The complaint alleged that the proxy statement was false and misleading in violation of sections 14(a), 10(b), and 20(a) of the Securities Exchange Act of 1934 and related SEC rules. The complaint sought damages for the class, rescission of the merger, and recovery of costs.
Before Shore’s action came to trial, the Securities and Exchange Commission filed a separate suit against the same defendants in the United States District Court for the Southern District of New York. The SEC complaint alleged that the proxy statement that had been issued by Parklane was materially false and misleading in essentially the same respects as those that had been alleged in the respondent's complaint. After a four-day trial, the District Court found that the proxy statement was materially false and misleading in the respects alleged, and entered a declaratory judgment to that effect. The court permanently enjoined the defendants from further violations of the securities laws and ordered them to offer rescission to shareholders who had tendered shares. The defendants did not appeal this judgment.
Shore then moved for partial summary judgment in the Eastern District of New York action, asserting that the defendants were collaterally estopped from relitigating the issues resolved against them in the SEC action. The District Court denied the motion on the ground that application of collateral estoppel would deny the defendants their Seventh Amendment right to a jury trial. The Court of Appeals for the Second Circuit reversed, holding that a party who has had issues of fact determined against him after a full and fair opportunity to litigate in a nonjury trial is collaterally estopped from obtaining a subsequent jury trial of these same issues of fact. Because of an intercircuit conflict with the Fifth Circuit’s decision in Rachal v. Hill, the Supreme Court granted certiorari.
Rosalind Reed challenged a federal statute that offered rewards for information leading to gun recoveries near schools. The Court examined whether Congress possessed authority under the Commerce Clause to enact the reward provision as part of a broader regulatory scheme.
United States v. Lopez514 U.S. 549 (1995)
In March 1992, Alfonso Lopez, Jr., a twelfth-grade student at Edison High School in San Antonio, Texas, arrived at school carrying a concealed .38-caliber handgun and five bullets. Acting on an anonymous tip, school authorities confronted Lopez, who admitted possessing the weapon. Local police arrested him and charged him under Texas law with firearm possession on school premises.
The following day, state charges were dismissed after federal agents charged Lopez with violating the Gun-Free School Zones Act of 1990. A federal grand jury indicted him on one count of knowing possession of a firearm at a school zone. Lopez moved to dismiss the indictment, arguing that the statute exceeded Congress's power to legislate control over public schools.
The district court denied the motion, concluding that the statute was a constitutional exercise of Congress's power to regulate activities affecting commerce because the business of schools affects interstate commerce. After a bench trial, the court found Lopez guilty and sentenced him to six months' imprisonment and two years of supervised release.
Lopez appealed to the Court of Appeals for the Fifth Circuit, which reversed the conviction, holding that the statute was beyond Congress's power under the Commerce Clause. The Supreme Court granted certiorari to review the case.
When does offering a reward to a witness violate professional conduct rules?
A lawyer may compensate a witness for time and expenses but may not offer a payment or benefit contingent on the content of testimony or the outcome of the case. Such a contingent reward constitutes an improper inducement that subjects the lawyer to discipline.
Does a promise of reward for past services create an enforceable obligation in contract?
A promise made in recognition of a benefit previously received may be binding to the extent necessary to prevent injustice. Enforcement is limited when the benefit was conferred as a gift or when the promised amount is disproportionate to the value received.
When does taking property with hope of a reward constitute larceny?
Taking goods with intent to return them and only hoping for a reward does not amount to larceny. Taking goods with no intent to return them unless assured of a reward creates a substantial risk of loss and therefore constitutes larceny.
424 U.S. 1 (1976)
…an effective means of revealing the type of political support that is sometimes coupled with expectations of special favors or rewards. That disclosure impinges on First Amendment rights is conceded by the Court, ante , at 64-66, but given the objectives to which disclosure is directed, I agree that the need for…