Osborne, a former chairman of the board of Locke Steel Company, entered into an

Question

Osborne, a former chairman of the board of Locke Steel Company, entered into an agreement with Locke that, on retirement, he would hold himself available for consultation and would not work for any direct or indirect competitors of the company. In exchange for these promises, the company agreed to pay Osborne $15,000 a year for the rest of his life. After paying for two years, the company stopped payments when Osborne refused to consent to a modification of the agreement. Osborne sued. The defendant, Locke, argued that there was no consideration because the contract was based on past services, and thus there was no detriment to the promisee (Osborne). Who won? Explain.

Explanation / Answer

A contract can be seen as a legal document which is applied to all the parties to the contract if tis i accepted and signed by them. So if the contract is signed by the parties in a sound mind, all the conditions mentioned in the contract have to be followed by them

As in the case presented in the question, the company stopped the payment to Osborne after two years and wants to renew the contract, this is a complete violation of the contract terms and condition as the contract which was formed earlier does not have any condition of revisiting the contractual terms or negotiating on the payments terms. As the new payments terms were offered by the company after two years, thus Osborne is not liable to consider the proposals. Thus Osborne should be in full capacity of winning the case.

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