Contracts · 1930
What Is Dougherty v. Salt About?
What the court held
The New York Court of Appeals held that the promissory note was not enforceable as a contract because it was intended as a gift and lacked consideration. The court reasoned that without an exchange of value or a binding agreement, Dougherty could not compel Salt to fulfill the promise made in the note. The decision reinforced the legal principle that gifts, even when documented in writing, do not create enforceable obligations unless supported by consideration.
The rule it established
In contract law, a promise is generally enforceable only if it is supported by consideration, which refers to something of value exchanged between the parties. A mere intention to make a gift, without any exchange or consideration, does not create a binding contract. This principle underscores the necessity of mutual assent and consideration in forming enforceable agreements.
Why it matters
Dougherty v. Salt is significant for law students as it clarifies the importance of consideration in contract formation. The case illustrates that intentions alone, without an exchange of value, do not create enforceable obligations. This principle is foundational in contract law and serves as a guiding framework for evaluating the enforceability of promises in various contexts.
Read the full Dougherty v. Salt case brief — facts, procedural posture, issue, and reasoning.