Issue: Under New York Law, is a party’s alleged written promise enforceable if the only consideration for the promise were not "bargained for" by that party under 5-1105 or 5-701 of the General Obligations Law?
|Area of Law:||Business Organizations & Contracts|
|Keywords:||Written promise; Consideration; "Bargained for"|
|Cited Cases:||60 N.Y.2d 262; 71 N.Y.2d 76|
|Cited Statutes:||N.Y. Gen. Oblig. Law § 5-1105; N.Y. Gen. Oblig. Law § 5-701(2)|
Section 5-1105 provides:
A promise in writing and signed by the promisor or by his agent shall not be denied effect as a valid contractual obligation on the ground that consideration for the promise is past or executed, if the consideration is expressed in the writing and is proved to have been given or performed and would be a valid consideration but for the time when it was given or performed.
N.Y. Gen. Oblig. Law § 5-1105.
First, by its terms, the statute applies only when the basis for denying enforcement would be “on the ground that consideration for the promise is past or executed.” Id.
Second, in addition to the other statutory requisites, it “would be a valid consideration but for the time when it was given or performed.” Id.
The express terms of the statute clearly do not dispense with the requirement that valid consideration consist of a benefit or detriment “bargained for” by the promisor. Moreover, a construction that dispenses with that fundamental requirement cannot be fairly implied. Even if it could be so implied such a construction is improper because this statute is in derogation of the common law. Statutes in derogation of the common law must be narrowly construed. See D’Amico v. Christie, 71 N.Y.2d 76, 83 (1987).
The statute of frauds provision, N.Y. Gen. Oblig. Law § 5-701(2), does not remove the usual requirement that an enforceable contract be supported by consideration. […]