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The Feinberg v. Pfeiffer Co. case brief examines promissory estoppel and the enforceability of gratuitous promises in employment contexts, establishing important precedent for reliance-based contract enforcement.
Feinberg v. Pfeiffer Co., 322 S.W.2d 163 (Mo. Ct. App. 1959)
Anna Feinberg worked for Pfeiffer Co. for nearly 40 years. The company's board of directors passed a resolution granting her a monthly pension of $200 for life, acknowledging her long and faithful service. Feinberg continued working for 18 months after the resolution, then retired and began receiving pension payments. After two years, the company stopped payments following a change in management, claiming the promise was a gratuitous gift without consideration.
Can a gratuitous promise to pay a pension be enforced under the doctrine of promissory estoppel when the promisee reasonably relies on the promise to their detriment?
Under the doctrine of promissory estoppel, a promise that the promisor should reasonably expect to induce action or forbearance on the part of the promisee, and which does induce such action or forbearance, is binding if injustice can be avoided only by enforcement of the promise. The remedy may be limited as justice requires.
The court held that the pension promise was enforceable under promissory estoppel. Feinberg's retirement in reliance on the promise constituted sufficient detrimental reliance to make the promise binding, even without traditional consideration.
The court reasoned that Feinberg's decision to retire was reasonable reliance on the company's promise. Her retirement represented a significant change in position that she would not have made without the pension promise. The company should have reasonably expected that their promise would induce her retirement. To allow the company to revoke the promise after she had relied on it would result in injustice.
This case demonstrates the application of promissory estoppel in employment contexts, particularly regarding pension promises. It shows how courts will enforce gratuitous promises when there is reasonable detrimental reliance, even without traditional consideration. The case is frequently cited in contracts courses as an example of how promissory estoppel can substitute for consideration in appropriate circumstances.
This case is crucial for understanding promissory estoppel and how it can enforce promises without traditional consideration. It's a key example of how reliance can create binding obligations in employment contexts.
The case reinforced that promissory estoppel can make gratuitous promises enforceable when there is reasonable detrimental reliance, particularly in employment pension contexts.
Professors use this case to teach the elements of promissory estoppel, the relationship between consideration and reliance, and how courts balance fairness concerns in employment relationships.
Feinberg v. Pfeiffer Co. stands as a landmark case in contract law, demonstrating how promissory estoppel can enforce promises that lack traditional consideration. The case highlights the importance of reasonable reliance and the courts' willingness to prevent injustice in employment relationships. For law students, this case provides essential understanding of how modern contract law balances formal requirements with equitable concerns.