## Facts

- George A. Varney, an architect/draftsman, was employed in Isaac E. Ditmars’s architectural office at $35 per week, later increased to $40 per week.
- Varney testified that Ditmars promised an additional $5 per week and, if Varney continued working hard and helped complete delayed projects, Ditmars would “close [his] books” at year’s end and give Varney “a fair share of [his] profits.”
- After the wage increase, Varney was placed in charge of drafting and worked substantial overtime, including Sundays and holidays; at least one long-delayed project was completed.
- Ditmars directed employees to work on Election Day; Varney did not report, later became ill, and was absent until about December 1.
- Ditmars discharged Varney by letter, citing absence and “disobedience,” and later refused to rehire him or acknowledge any profit-sharing agreement.
- Varney sued for unpaid wages and for the promised “fair share” of profits, asserting reliance on the promise when performing extra work.

## Issues

1. Whether an employer’s oral promise to give an employee a “fair share” of profits at year’s end is sufficiently definite to form an enforceable contract.
2. Whether the employee may recover additional compensation for extra work performed in reliance on that promise when the profit-sharing term is indefinite.
3. Whether recovery may be available in quantum meruit for the reasonable value of services beyond wages paid.

## Decision

- The New York Court of Appeals affirmed dismissal of the claim seeking a share of profits.
- The court held the promise of a “fair share” of profits was too vague and uncertain to be enforced because it supplied no objective method to determine the amount.
- The court indicated that, despite the unenforceable profit-sharing term, Varney could potentially recover on a quantum meruit theory if he proved his services were worth more than the salary he received.

## Legal Principles

- An enforceable contract requires definiteness as to essential terms or a clear, objective standard for supplying missing terms.
- A promise to pay a “fair share” of profits, without a percentage, formula, industry usage, or other objective benchmark, is indefinite and unenforceable because it leaves the amount to speculation.
- Courts may imply a “reasonable price” when an external standard (market value or customary charges) allows measurement, but they will not create a profit-sharing amount where no comparable standard exists.
- When the alleged promised benefit is indeterminate, reliance-based recovery fails to the extent the claimant cannot prove prejudice in definite monetary terms.
- Even if a promised compensation term is unenforceable for indefiniteness, a plaintiff may pursue quantum meruit for the reasonable value of services if supported by proof that the services exceeded the compensation paid.

## Conclusion

The court refused to enforce an employer’s promise to award an employee a “fair share” of profits because the term was an essential compensation provision lacking any objective measure, while leaving open the possibility of noncontract recovery for the reasonable value of services beyond wages actually paid.


Varney v. Ditmars, 217 N.Y. 223, 111 N.E. 822 (N.Y. 1916)