Facts
- Dr. Robert C. Browning and Dr. O. Arthur Johnson executed a written agreement under which Browning would sell his osteopathic practice and equipment to Johnson.
- Before the sale became effective, Browning decided not to proceed and asked to be released from the sale agreement.
- Johnson initially resisted but later agreed to cancel the sale agreement if Browning promised to pay him $40,000.
- The parties executed a second agreement canceling the sale contract in exchange for Browning’s $40,000 promise.
- Months later, Browning sued for declaratory relief and restitution, alleging the $40,000 promise lacked consideration and was based on mutual mistake about the enforceability of the original sale contract.
- The trial court concluded the original sale contract was unenforceable for lack of mutuality and indefiniteness but held the cancellation agreement was supported by consideration because Johnson surrendered his claimed rights under the original contract.
- Browning appealed.
Issues
- Whether Johnson’s relinquishment of claimed rights under the earlier sale agreement constituted sufficient consideration for Browning’s promise to pay $40,000, even if the earlier agreement was unenforceable and the exchange appeared economically unequal.
- Whether Browning could avoid the cancellation agreement based on mutual mistake where the mutual-mistake theory was not raised in the trial court.
Decision
- The Washington Supreme Court affirmed.
- Johnson’s surrender of his rights under the sale agreement at Browning’s request was a legal detriment and therefore sufficient consideration to support Browning’s promise, regardless of comparative value.
- The court declined to consider mutual mistake because it was not presented to the trial court.
Legal Principles
- Courts generally do not evaluate the adequacy (comparative value) of consideration; the inquiry is whether consideration is legally sufficient unless the disparity indicates constructive fraud.
- In a unilateral contract, an act or forbearance bargained for by the promisor, including relinquishment of a claimed right, is sufficient consideration when it constitutes a legal detriment to the promisee.
- The later determination that the surrendered claim or contract was unenforceable does not negate consideration where the promisor bargained for the relinquishment of the asserted rights.
- Issues not raised at trial are ordinarily not reviewable for the first time on appeal.
Conclusion
The court enforced Browning’s $40,000 promise because Johnson’s bargained-for relinquishment of asserted contractual rights was sufficient consideration, and it rejected Browning’s mutual-mistake argument as procedurally barred on appeal.