Disken v. Herter
77 N.Y.S. 300 · 1902
Facts
Defendant Herter owned five houses in Manhattan, and her husband, Peter Herter, acted as her agent for construction contracts. On June 4, 1901, plaintiff Disken alleged he contracted with Peter Herter to perform plastering work and furnish materials for the five houses for $24,000. Disken began performance, but in September 1901, the defendant prevented him from completing the work. Peter Herter had secretly contracted with another firm for $5,600 less on June 17, 1901, after the alleged agreement with Disken. The defendant contended no binding contract was made, arguing it was contingent on a bond and a formal written agreement.
Issue
Was a valid and binding contract formed between the plaintiff and the defendant's agent, or was the agreement merely an understanding to contract, contingent on a formal written document and a bond?
Holding
Yes, a valid and enforceable contract was made between the plaintiff and the defendant's agent. The court affirmed the judgment in favor of the plaintiff.
Rule
An understanding that a contract should be formally drawn up and put in writing does not negate its binding force if all substantial terms are agreed upon, and there is no positive agreement that it shall not be binding until formally executed. The failure to furnish a bond, if introduced as an afterthought or subterfuge after a contract is made, does not invalidate the initial agreement.
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