Whitten v. Greeley-Shaw

Supreme Judicial Court of Maine · Contracts

Contractsconsiderationforeclosureassentconsiderationbargained-for exchangeforbearancebilateral contract

Facts

The plaintiff, as assignee of a promissory note secured by a mortgage on the defendant's Harpswell home, sought foreclosure after the defendant failed to pay the $64,000 long overdue on the note. The defendant admitted signing the note and mortgage deed but claimed she did not understand the documents' nature or legal significance until later, even though she had been given and encouraged to take the opportunity to read them. In a counterclaim, she sought enforcement of a separate one-page typewritten writing she had prepared during the parties' intermittent affair, under which the plaintiff would make monthly payments, pay certain expenses, provide annual trips and jewelry, and maintain contact. The only term arguably benefiting the plaintiff was the defendant's statement that she would not call his homes or offices without his prior permission.

Issue

Was the promissory note enforceable despite the defendant's claim that she did not understand the documents she signed, and was the separate written "agreement" enforceable as a contract where the defendant's alleged promise of forbearance was not shown to have been bargained for by the plaintiff?

Rule

A party who signs a contract after being given the opportunity and encouragement to read it cannot avoid its effect merely by later objecting to contents she barely looked at. Every contract requires consideration, and a promise of forbearance can serve as consideration only when it is bargained for, sought by the promisor, and given in exchange for the return promise.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

In Portland, Oregon, Lena Ortiz drafted a one-page writing stating that Nolan Price would pay her $2,000 each month and cover her apartment rent for a year. The only term benefiting Nolan said Lena would not appear at Nolan’s workplace without his permission, but Lena added that line on her own because she thought the paper should contain something from her side.

If Lena sues to enforce the writing as a bilateral contract, what is the strongest argument against enforcement under the governing rule?

Explanation. A promise of forbearance may constitute consideration only if it was sought by the promisor and given in exchange for the return promise. Here, Lena inserted the no-appearance term unilaterally, and there is no evidence Nolan bargained for that restraint. So the purported return promise was not bargained-for consideration and cannot support enforcement. (Derived from Whitten v. Greeley-Shaw (n.d.).)