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New York Court of Appeals - 118 N.E. 214, 222 N.Y. 88
tl;dr:
A fashion maven entered into an exclusive licensing agreement with Plaintiff, but then licensed her products to others without consulting Plaintiff.Video Summary
Case Summary
Wood v. Lucy, Lady Duff-Gordon (1917) is a key case in contract law, which introduced the concept of implied terms and consideration. The case involved a famous fashion designer, Lady Duff-Gordon, who signed an exclusive contract with advertising agent Wood to market her designs and endorsements in exchange for a share of the profits. Although the contract did not specifically detail Wood's responsibilities, it granted him sole rights to use Lady Duff-Gordon's endorsements.
Lady Duff-Gordon breached the contract by endorsing products without Wood's permission and keeping all the profits. Wood sued her for damages, claiming she broke their agreement. She argued the contract was invalid due to a lack of consideration, as Wood did not promise to do anything in return for her exclusive rights.
The trial court ruled in Wood's favor, but the appellate court reversed, agreeing with Lady Duff-Gordon. Wood then appealed to the New York Court of Appeals, which reinstated the trial court's decision, holding her accountable to the contract.
This case highlights how courts consider context and circumstances to interpret contracts and imply unstated terms and obligations to uphold the parties' intentions. It also demonstrates contract enforcement even without an express promise as long as some exchanged benefit or detriment exists. This case showcases contract law's adaptability to evolving social and economic environments to provide fair and reasonable outcomes.
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The case involves a contract between the plaintiff and defendant, where the plaintiff had the exclusive right to market the defendant's endorsements and designs. The defendant breached the contract by placing her endorsements on fabrics, dresses, and millinery without the plaintiff's knowledge and withholding profits. The court finds that a promise can be implied in the contract, and the plaintiff had an obligation to use reasonable efforts to place the defendant's endorsements and market her designs. The decision made by the Appellate Division is erroneous, and the decision made by the Special Term should be upheld. The plaintiff can sue for damages, and the Appellate Division and higher court will have to pay for the costs.
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