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Indefinite Agreements Case: Parties: Varney v. Ditmars (1916) p.

400-405 [NY Court of Appeals] Plaintiff - Varney (employee) Defendant - Ditmars (employer) Employee's complaint was dismissed. Plaintiff appealed.

Procedural History:

Facts: • Oct 10, 1910 - Varney applied for employment with Ditmars, and said he would start working for $40/week. He was then employed at $34/week. A short time later, Varney informed Ditmars that ha had another job offer, and Ditmars told him that if he stayed and helped him with some projects, he would offer him a better future. • Feb 1, 1911 - Ditmars (def) said: "I am going to give you $5 more a week; if you boys will go on and continue the way you have been and get me out of this trouble and get these jobs started that were in the office three years, on the 1st of next January I will close my books and give you a fair share of my profits." Varney worked overtime, many Sundays and Holidays, and got a lot of the work done. From then on, Varney was paid $40/week. • Nov 6, 1911 (night before general election) - Ditmars asked Varney and all employees to work the next day (Election Day). Varney told Ditmars he wanted to stay home for the elections. • Nov 7, 1911 (4pm) - Varney stayed home for the election and later in the day became ill and stayed home for a few weeks as he recovered • Nov 11, 1911 - Ditmars sent Varney a letter terminating his employment because Varney stayed home election Day after Ditmars had asked him to work. • Once Varney felt better, he went to Ditmars telling him he was available to work, and that there was an agreement, but Ditmars said no agreement. • Varney brought suit to recover: for services during Nov 7-Dec 31, 1911 (he was sick beginning Nov 7) at a rate of $40/week. And for a fair and reasonable profit of the period from Feb 1, 1911 - Jan 1, 1912. Issue: Whether there was an enforceable promise when Ditmars said he would hive Varney a "fair" share of the profits. Holding: Complaint dismissal Affirmed.

Reasoning: The words fair and reasonable have a definite and enforceable meanings when used in business transactions dependent upon the intentions of the parties in use of such words. The statement promising a fair share of profits made by the Defendant is vague, indefinite and uncertain and the amount can not be computed from anything said by either party. The contract was never consummated and was left subject to the will of the Defendant for further negotiation. The court held that the employee was entitled to recover only the difference between the amount he was paid and the actual value of his work, if the value was above the amount paid, for work actually performed. Dissent: (Cardozo) It is not true that a promise to pay an employee a fair share of the profits in addition to his salary is always and of necessity too vague to be enforced. The promise must appear to have been made with contractual intent. If that intent is present, it cannot be said from the mere form of the promise that the estimate of the reward is impossible. The evidence would permit the jury to find that the Plaintiff was discharged without cause and he is entitled to damages measured by his salary for the unexpired term. RULE: For the validity of the contract, the promise, or the agreement, of the

parties to it must be certain and explicit and that their full intention may be ascertained to a reasonable degree of certainty. Their agreement must be neither vague nor indefinite, and, if thus defective, parol proof cannot be resorted to. However, this does not bar recovery based on quantum meruit (reasonable value of services), but only for work actually performed in reliance of the indefinite promise.