## Facts

- Dale Warren Dyer, an employee of National By-Products, Inc., lost his right foot in a workplace accident on October 29, 1981.
- The employer placed Dyer on paid leave until August 16, 1982, when he returned to work as a foreman.
- On March 11, 1983, the employer indefinitely laid Dyer off.
- Dyer sued, alleging the employer made an oral promise of lifetime employment in exchange for Dyer’s forbearance from pursuing a personal-injury claim against the employer and/or coemployees.
- The employer denied making any lifetime-employment promise and argued that workers’ compensation was Dyer’s exclusive remedy, leaving no claim to forbear.

## Issues

1. Whether a party’s good-faith forbearance from litigating a claim can constitute consideration for a settlement-type agreement when the claim later proves invalid or unfounded.
2. Whether summary judgment was proper where a factual dispute existed about Dyer’s good-faith belief in the validity of the forborne claim and whether the alleged promise was exchanged for that forbearance.

## Decision

- The Supreme Court of Iowa reversed the grant of summary judgment and remanded.
- The court held that forbearance may be sufficient consideration if the party forbears in good faith, even if the underlying claim is ultimately not legally viable.
- The court concluded that the record left a genuine issue of material fact as to whether Dyer reasonably and in good faith believed he had a claim and forbore from pursuing it in exchange for the alleged lifetime-employment promise.

## Legal Principles

- A promise to forbear asserting a claim may serve as consideration when the claim is doubtful due to uncertainty of law or fact, or when the claimant honestly believes in good faith that the claim may be valid.
- Consideration analysis in the compromise/settlement context focuses on good-faith surrender of a claimed right, not solely on the claim’s ultimate legal merit.
- Summary judgment is improper when material facts remain disputed, including disputes about a party’s good-faith belief and whether an exchange (promise-for-forbearance) occurred.

## Conclusion

The court held that good-faith forbearance from suing can support an alleged contract even if the forborne claim would fail on the merits, and it remanded for factfinding on Dyer’s good-faith belief and the existence and terms of the asserted lifetime-employment agreement.


Dyer v. Nat’l By-Prods., Inc., 380 N.W.2d 732 (Iowa 1986)