stating that contract must have intent to benefit third party beneficiary for it to have right to enforce contract
How later courts described this case
- stating that contract must have intent to benefit third party beneficiary for it to have right to enforce contract
- “Even when the obligation of a unilateral promise is suspended for want of mutuality at its inception, still, upon performance by the promisee a consideration arises which relates back to the making of the promise, and it becomes obligatory.”
Written by the judges who cited it.
The opinion
Murphy, P. J. (concurring).
The Repurchase Agreement is unambiguous and may be construed by this court from the four corners of that instrument. (10 NY Jur, Contracts, §§ 189-190.) I would agree with the majority that paragraph 9 of the Repurchase Agreement covers all assignments made by Domler to Yegen, both before and after the date of its execution. However, in accordance with the retrospective effect of paragraph 9, I would read paragraph 6 to cover all assignments made by Yegen, both before and after the execution date of that agreement. Flemington, as the assignee of the subject lease acquired by Yegen from Domler, must be considered a third-party beneficiary entitled to protection under the Repurchase Agreement.
I would dismiss the complaint on the ground that no consideration was given by Yegen for the Repurchase Agreement. The introductory paragraph of that agreement provides, inter alia, that: "You [Yegen] may purchase such agreements offered to you hereunder, as you shall determine in your sole discretion”. "A promise must be definite to be sufficient consideration for a counterpromise; an indefinite promise is insufficient consideration.” (17 Am Jur, Contracts, § 107, p 453.) While Domler agreed to repurchase any delinquent agreement, Yegen never promised to purchase any agreement. Since Yegen could do as it pleased, the Repurchase Agreement lacks mutuality of obligation, and is thus unenforceable (Strobe v Netherland Co., 245 App Div 573, 578 ).
Section 5-1105 of the General Obligations Law is not controlling because it is not stated in the Repurchase Agreement that Yegen was being bound thereunder for any past consideration it had given. Paragraph 9 merely refers to the retroactive effect of the agreement; it can in no way be construed as expressing past consideration given by Yegen.
For the reason stated, I agree that the complaint should be dismissed.
Markewich and Sandler, JJ., concur with Lupiano, J.; Murphy, P. J., and Sullivan, J., concur in an opinion by Murphy, P. J.
Judgment, Supreme Court, New York County, entered on December 14, 1977, unanimously reversed, on the law, vacated and the complaint dismissed. Defendant-appellant shall recover of plaintiff-respondent $75 costs and disbursements of this appeal.