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Wood v. Lucy, Lady Duff-Gordon

New York Court of Appeals
118 N.E. 214, 222 N.Y. 88 (1917)

Written by Jamie Milne, JD

Facts

Well-known fashion designer Lucy, Lady Duff-Gordon (defendant) entered an agreement with Otis Wood (plaintiff), whereby Duff-Gordon granted Wood the exclusive rights to place Duff-Gordon’s endorsement on others’ designs and to market and sell Duff-Gordon’s own designs. The exclusive rights were to last for at least one year and renew annually until terminated. In exchange for granting the exclusive rights, Duff-Gordon was to receive 50 percent of all profits from Wood’s activities concerning Duff-Gordon’s endorsements and designs. Wood agreed to keep records of all accounts and to obtain any patents, copyrights, and trademarks necessary to protect Duff-Gordon’s designs. When Duff-Gordon later contracted with another company to place her endorsement on designs and kept the profits for herself, Wood sued Duff-Gordon for breach of contract. He argued that Duff-Gordon had breached Wood’s exclusive right to place Duff-Gordon’s endorsement on others’ designs. Duff-Gordon filed a motion for demurrer, arguing that the agreement with Wood was not an enforceable contract because it did not obligate Wood to perform any act and the contract therefore lacked consideration. The trial court denied the motion. The appellate division reversed, entering judgment for Duff-Gordon. Wood appealed to the New York Court of Appeals.

Rule of Law

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Holding and Reasoning (Cardozo, J.)

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