## Facts

- Bill W. Baker worked for Marshall Durbin Food Corporation since 1965, became a senior executive, and joined the board in 1998.
- In the late 1990s, the company experienced major financial losses and internal conflict among controlling family shareholders, causing instability in management.
- To retain senior management, the company (through its majority owner) offered Baker an “agreement of termination and/or early retirement,” approved by the board.
- The agreement promised Baker five years of monthly payments equal to his then-current salary upon specified triggering events, including the majority owner’s incapacity or death or certain changes in corporate control.
- The agreement recited consideration of “Ten Dollars ($10.00) and other good and valuable consideration,” stated it was not an employment contract, and preserved Baker’s at-will status.
- After the majority owner was diagnosed with cancer and later declared incapacitated, Baker became president and notified the company that a triggering event had occurred and he would thereafter work as a contractor.
- After the owner’s death, a reconstituted board repudiated the agreement and refused payment.
- Baker sued for enforcement; the chancery court held the agreement enforceable and ordered payments beginning September 10, 2001.
- The company appealed, contesting consideration and the payment commencement date.

## Issues

1. Whether the early-retirement/termination agreement was supported by sufficient consideration despite Baker’s at-will status, or instead was an unenforceable illusory promise.
2. Whether the trial court applied the correct contractual date for the commencement of Baker’s payments.

## Decision

- The court affirmed enforcement of the agreement, holding that sufficient consideration supported the company’s promise.
- The court rejected the argument that the company’s obligations were illusory merely because Baker remained an at-will employee.
- The court reversed and rendered as to the payment start date, finding the trial court’s selected commencement date was erroneous under the agreement’s timing provisions.
- The court set an earlier commencement date tied to Baker’s formal elevation to president (reported as July 9, 2001), rather than September 10, 2001.

## Legal Principles

- A written contract’s recital of consideration creates a presumption of consideration, and the party challenging consideration bears the burden to rebut it.
- A unilateral contract may be formed where one party’s promise is conditioned on the other party’s performance; the performance supplies consideration upon completion of the contingency.
- Continued service during an unstable period, provided in reliance on a promised benefit, can constitute present consideration rather than unenforceable “past services.”
- Forbearance from seeking alternative employment in reliance on a promise may constitute consideration where it alters the promisee’s legal relations and provides a benefit to the promisor.
- Courts enforce contractual timing provisions as written and will correct an erroneous commencement date when the record and contract establish a different effective date.

## Conclusion

The court enforced the company’s early-retirement agreement because Baker’s continued service and forbearance from pursuing other employment supplied consideration despite his at-will status, but it modified the judgment to correct the contractually required date when payments should begin.


Marshall Durbin Food Corp. v. Baker, 909 So. 2d 1267 (Miss. Ct. App. 2005)