My very basic understanding of contract law had me to believe for many years that all contracts required some type of exchange in order for the contract to be valid and enforceable.
However, I recently reviewed a “Gift Agreement” that stated “this gift agreement is binding.”
I’ve researched a bit online and what I have found seems to support my initial understanding.
Does anyone know of any cases where an agreement to give a gift is binding? Did I miss something in my research?
Note:Not planning to stiff the charity or anything like that, just a little curious about the language.
Is this a religious group, or affiliated with a religious group? They might claim that it is binding in the sense that if you back out after signing, that is a sin and their God may be soon smiting you…
That is the definition of a contract–if there is not a consideration by both parties, it’s not a contract. What else does the “agreement” say? If it’s one-sided then it won’t be enforceable. They can claim that it’s “binding” all day long but that doesn’t mean that it is. However, if there is something buried in there, like you get a one-year membership to something, then it might be technically enforceable.
IANAL and if you really want the right answer you need a lawyer to read your actual agreement.
I’ve gone through it pretty carefully (it’s only one page) and there is no consideration whatsoever. No name plate, membership, kazoo or skywriting. Not that I’m looking for any, and again, no intention of not donating the money. Just thought it was odd and wanted to know if anyone had any further knowledge on the subject.
Various cases have found theat agreements to donate to charity are binding. They aren’t binding in contract directly, but in the contract-like theory of promissory estoppel.
Essentially, you can be prevented (estopped) from denying your promise in certain situations, even though the promise you made was donative (not done for consideration). One such situation is if the other person reasonably relied on the promise to their detriment. The other is if you make a promise to a charity.
Thank you for this information. It’s very interesting. It seems like the trend is that the agreement is binding if either a) some type of consideration is provided (like the building being named for the donor) or b) expenses are incurred based on the agreement (we already bought 1,000 textbooks for the children).
in a) you have formed a contract by an exchange of consideration.
in b) there need be no exchange of consideration. The court will act to resolve the detriment; remedies under the promissory estoppel theory must be “limited as justice requires” ie, do no more than make the person who had the detriment whole. So for example, say you offered $1 million, the organization bought $10,000 worth of books in reasonable reliance on your promise. You will be liable for the cost of the books, but not the $1 million you promised.
The additional case is c) where the charity has made clear that the promise will be binding. Then you are liable for the whole of your promise.
Most courts would hold the “this gift is binding” language you located in your materials sufficient to bind you to a charitable promise.
Disclaimer: I am speaking in general principles, which may vary by state. Speak to an attorney licensed in your jurisdiction if you encounter a legal problem. I am not your lawyer and this is not intended as advice.
It was just in the news yesterday I think that Garth Brooks was awarded his money back after the hospital he donated it to failed to build the women’s care unit named after his mother. I’m sure you can easily Google more details.
But it sounds like he was receiving consideration – the naming rights – for his money and thus had a contract under the usual common-law contract principles. (Googles a news story. :)) It seems that the hospital was arguing that any promise to name the unit came after the donation and thus wasn’t consideration. The jury disagreed.
Since the $500k was already given and no written agreement specified any consideration it would still seem as if this (in theory) should fall under category c.
That being said, I’m glad he got his money back (and a little extra).
