## Facts

- Janis Carlisle owned and operated Wishing Well Preschool, Inc. and related entities; Thomas Carlisle (her then-husband) solely owned and operated T & R Excavating, Inc.
- After the parties married, Janis performed bookkeeping work for T & R; she testified Thomas offered to pay her, she refused, and he later said he would do work on her building instead, but timing and linkage to any later promise were not established.
- Janis decided to build a preschool and kindergarten facility and purchased land for the project; Thomas assisted with site selection and choosing a general contractor.
- On September 25, 1992, T & R presented a written proposal to perform “all of the excavation and site work” with a stated budget of $69,800.
- The proposal stated that $40,000 in “labor, equipment costs, overhead and profit” would be provided “at no cost” to Wishing Well, while $29,800 in materials would be billed to Wishing Well at T & R’s cost.
- Janis signed an “Acceptance of Proposal” stating the “prices, specifications and conditions” were satisfactory and accepted.
- After Janis and Thomas separated in late 1992, T & R did not complete the contemplated work; Janis hired another contractor and the facility opened one week late.
- Plaintiffs sued for breach of contract; the trial court found a contract existed and awarded $35,790.75 in damages.
- T & R appealed, arguing the agreement lacked consideration and was not sufficiently definite.

## Issues

1. Whether the September 25, 1992 proposal and acceptance formed an enforceable contract supported by consideration, or instead was a gratuitous promise (a conditional gift) and therefore not binding.

## Decision

- The appellate court reversed the trial court’s judgment.
- It held no enforceable contract existed because T & R’s promise to provide labor, equipment, overhead, and profit “at no cost” was gratuitous and not supported by bargained-for consideration.
- Because no contract existed, the damages award for breach of contract could not stand.

## Legal Principles

- Consideration requires a bargained-for exchange: a benefit to the promisor or a legal detriment (act, forbearance, or return promise) by the promisee, given in return for the promisor’s promise.
- A gratuitous promise is not enforceable as a contract, even if performance is subject to conditions the promisee must satisfy to receive the benefit.
- A condition that merely facilitates receipt of a promised benefit (such as paying costs for materials while labor is free) does not, by itself, supply consideration absent evidence the condition was the price of the promise.
- Past services or conduct do not establish consideration for a later promise without evidence the promise was made in exchange for that performance (mutual inducement).

## Conclusion

The court concluded the written proposal, though accepted, reflected a conditional gift of free excavation labor rather than a bargained-for exchange; lacking consideration, it did not create an enforceable contract, and the breach-of-contract damages award was reversed.


Carlisle v. T & R Excavating, Inc., 123 Ohio App. 3d 277, 704 N.E.2d 39 (Ohio Ct. App. 1997)