Whether an exclusive-marketing agreement is enforceable when the agent does not expressly promise to use efforts to market the principal's designs and endorsements.
Holding
Yes. Wood's promise to use reasonable efforts was implied by the agreement, so the contract was supported by mutual obligation and could be enforced.
Reasoning
The Court rejected a rigidly formal approach under which a contract fails simply because it does not state every promise in precise words. A writing may be enforceable when, read as a whole, it is “instinct with an obligation” that the parties expressed imperfectly rather than omitted altogether.
Lady Duff-Gordon gave Wood an exclusive agency. For at least a year, she could not market her designs or place her endorsements except through him. Accepting that exclusive privilege carried with it the corresponding duty to use it; the Court would not read the contract as allowing Wood to hold the exclusive right while doing nothing and leaving her entirely dependent on his whim.
The parties' financial arrangement strongly confirmed that implied duty. Lady Duff-Gordon's only compensation for granting exclusivity was half of the profits and revenues Wood produced. If Wood could choose not to seek any business, she could receive nothing at all despite having surrendered control over her commercial opportunities. Implying reasonable efforts gave the arrangement the business efficacy the parties must have intended.
Other express provisions reinforced the same conclusion. Wood promised to account monthly for money received and to obtain protective intellectual-property rights when, in his judgment, they were necessary. Those promises did not themselves require him to generate business, but they made sense as parts of an ongoing undertaking to exploit Lady Duff-Gordon's designs and endorsements. Taken together with the profit-sharing promise, they supported an implied promise to make reasonable efforts to create the profits and revenues to be shared.