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Corbin on Contracts

Copyright 2007, Matthew Bender & Company, Inc., a member of the LexisNexis Group.

PART I FORMATION OF CONTRACTS

TOPIC A OFFER AND ACCEPTANCE

CHAPTER 4 INDEFINITENESS AND MISTAKE IN EXPRESSION

1-4 Corbin on Contracts § 4.2

§ 4.2 Time of Performance Indefinite-Promises of ''Permanent'' Employment-At Will Employment

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It is characteristic of many offers and agreements to neglect to specify a time for acceptance or a time for the rendition of performance. Yet it may be clear that there is an intention to create a power of acceptance or a valid contract. In such cases it is evident that the party or parties do not regard any specific point of time as essential. Usually acceptance is given or performance rendered without the occurrence of any dispute. When such a dispute does arise, it is necessary for the court to decide whether the power of acceptance was to last forever, or if not, for how long, also to decide whether the time for performance was left to the discretion of the one promising to render it. The result generally reached is that the time is neither unlimited nor discretionary. Acceptance must be within a ''reasonable time''n1 and the promised performance must be rendered within a ''reasonable time.''n2

There is a large element of uncertainty in the determination of the length of a ''reasonable time'' in any particular case. Of course, parol testimony on the question is always admissible in spite of the so-called ''parol evidence rule.''n3 Furthermore, there is a difference between what may be reasonable in the light of the circumstances existing at the time the contract is made and what is reasonable in the light of circumstances as they occur during the course of performance.n4

Parties often make a bilateral agreement for the sale of goods at a specified price or for the rendition of services at specified wages, fixing a time for delivery of the goods or rendition of the services but not fixing a date for making the money payment. In such cases the gap is so readily supplied from general usage or the previous course of dealing that no uncertainty is perceived and both parties are bound. In the absence of agreement or course of dealing to the contrary, the price is payable when the goods are received,n5 and wages and salaries are payable at the end of a period of actual service, a period that is indicated either by the terms of agreement or by custom, but in the case of protected classes of workers, as dictated by statute.n6

Simple agreements for the sale of goods are frequently made without expressing in words any time for either delivery or payment. Seldom will it be held that this makes it too uncertain for enforcement. Usage and custom will generally furnish a basis for determining whether the transaction is a cash sale or a credit sale, including the length of the credit period, and the finding is most likely to be that delivery is promised within a reasonable time.n7 Under a contract to sell goods still to be manufactured, a reasonable time for delivery must take into account such factors affecting performance as the seller's factory capacity, the extent of prior orders to be filled, and the availability of labor and materials.n8

It appears, therefore, that a contract is usually not too indefinite for enforcement merely because it fixes no time for an agreed performance. If that performance is something that is simple and can readily be rendered at any one or more of many moments of time, the court will infer that the parties have agreed upon performance within a reasonable time. Of course, this standard is itself indefinite. What is reasonable is a question of factn9 and a matter on which opinions will differ. Nevertheless, it is a standard that is practically workable and one that results in satisfactory solutions.

In certain kinds of contracts, this reasoning may not be applicable. Thus, where one party promises to make a loan of money to another, the promise is hardly enforceable unless the length of the period of credit is agreed on.n10 The borrower would probably not be satisfied with a loan repayable ''on demand'', and usually there would be no data upon which to determine a reasonable time. If such data exist, indicating the probable intention of the parties, the evidence thereof should be received.n11 Thus, if security, and some notes of definite duration are given for the promise of a line-of-credit, it should be clear that the parties had something relatively definite in mind as to the duration of the line-of-credit, such as the maturity cycles of the promisee's livestock.n12

Not infrequently parties make an agreement containing promises of reciprocal continuing performances to be rendered for a period of time that is not specified expressly or impliedly.n13 Sale of goods arrangements of indefinite time are frequent. Such arrangements may be informal or take the form of contracts of indefinite duration. Distribution, requirements, output, franchise and other arrangements for the supply and purchase of goods often contain no period of duration or indicate that they continue until termination by notice. The Uniform Commercial Code addresses these in U.C.C. § 2-309 which provides:

''(2) Where the contract provides for successive performances but is indefinite in duration it is valid for a reasonable time but unless otherwise agreed may be terminated at any time by either party.''

''(3) Termination of a contract by one party except on the happening of an agreed event requires that reasonable notification shall be received by the other party and an agreement dispensing with notification is invalid if its operation would be unconscionable.''

This provision contemplates that even if an agreement has no duration term, it is valid but is terminated after a reasonable time, and in addition may be terminated by a party by giving reasonable notice. By reasonable notice is meant a reasonable period of notice. This is quantified by taking into account the period the terminated party needs to make a substitute arrangement as well as the period of time this party may need to recoup its investment that may have been made to perform the contract.n14 If the agreement provides that it may be terminated at any time, the provision would nonetheless require reasonable notice. If it provided that it is terminable without notice, or upon a specified period of short notice, it must be determined if the agreement is unconscionable.n15 If it is, the agreement must be reformed to allow a reasonable period of notice. More particularized statutes govern some industries.n16

Leasehold contracts, generally executed on some stereotyped printed form, may contain a provision that the lease shall be ''renewable'' at the lessee's option, without specifying any definite period of time. Such a provision is not too indefinite for enforcement. It will be ''implied'' that the renewal shall be for the same time as the original one and on similar terms.n17 A provision for an extension ''for ... years'' has been given similar effect.n18

Employment contracts. One of the most significant developments in recent decades has been the clarification of the obligations created by the employment relation of indefinite duration. For about a century, except for some exceptional circumstances, American courts took the position that employment agreements that had no defined period of obligation, were terminable at will. The employer could discharge the employee ''for good cause, for no cause or even for a cause morally wrong.''n19 Similarly the employee could walk off the job at any time. In short, these relations were not executory contracts. No executory obligations existed except as they were created by performance. With some important qualifications, this remains the law.

If, on proper interpretation, the parties intend that performance is terminable at will by either party, the agreement is not a contract at all. Yet it is not vague or unclear. A refusal to perform is not a breach, being merely the exercise of the reserved power to terminate.n20 Where the agreement provides for payment of a stated weekly, monthly, or yearly salary, the facts may or may not justify the implication of a promise that the employment shall continue for at least one complete salary period. Agreements for employment at a specified salary, without mentioning any time limit, are generally interpreted as terminable at will by either party, the specification of salary merely fixing the rate of payment, not the time the employment is to last.n21 Of course, as services are actually rendered, a unilateral contract for payment at the agreed rate arises. The traditional approach described in this paragraph remains the general rule and for most purposes there is a rebuttable presumption that a hiring is at will.n22 Certain qualifications, however, have been made and expanded in recent decades.

Even if a position is described by the employer as permanent, the majority of cases have held that the hiring is at will.n23 A frequently recurring case is found in agreements for continuing employment, often described as permanent, in settlement of claims for personal injury, claims against an alleged tort-feasor or against an employer bound to pay workers' compensation or against some liability insurer. In some of these cases, the agreement was held to be too uncertain and indefinite for enforcement, partly because there was no statement of the character or amount of the work to be done or of the payment to be made therefor.n24 In addition to making short shrift of the word ''permanent'', courts have been reluctant to base a contract on other words of assurance made by employers to employees.n25

If the employee has given an executed consideration, such as the discharge of a claim for damages, in return for a promise of permanent employment, the promise is more likely to be found to mean employment as long as proper service is performed. In cases of this kind, if the promisee has already rendered the requested action or forbearance and the promisor has received the benefit thereof, the court should be very ready to hold that the promise is not too indefinite for enforcement. The process of reasonable implication should be carried much further than in cases where performance by the plaintiff has not yet been rendered.n26 It is not easy to estimate the value of the benefits received, thus making the quasi-contractual remedy inadequate, and the delay may make it impossible or difficult to maintain suit on the original claim. The only just and adequate remedy may be the enforcement of the express promise, filling its gaps by reasonable implications. If this is not possible, the quasi contract remedy is all that is left.n27 In addition to performing its usual function of cementing a bargain, the presence of consideration in addition to the rendition of services, is a strong evidentiary factor in reaching a conclusion that the parties had something definite in mind. Other evidentiary factors may also prove such definite intent.n28

Contracts of employment for life are sometimes made for their own sake and not for the purpose of settling some unliquidated claim. The term ''lifetime'' is far more definiten29 a term than the term ''permanent.'' This latter term is frequently used in classified ads and in common speech to denote a position that is not seasonal or otherwise of a reasonably certain temporary duration. The word ''permanent'' is commonly used to mean much less than ''eternal''n30 or ''until death do us part.'' Courts have been more willing, and properly so, to regard ''lifetime'' as a definite period of time.n31

Legislation has been enacted protecting at-will employees from dismissal because of union activities, racial or religious prejudice, age discrimination, gender and other similar grounds.n32 The courts of many jurisdictions have added to the protection of employees by holding employers liable for discharges that are based on grounds that violate public policy. Thus, if a worker is fired for filing a workers' compensation claim for an on-the-job injury, the employer has breached an obligation inherent in the employment relation. Workers' compensation legislation, having been enacted for the protection of workers could effectively be nullified by the overhanging threat of discharge.n33 From decisions such as this, even broader protection has been conferred upon employees. Rules of basic dignity whether based on legislation or not have been incorporated into the employment relation.n34 Thus, where a married woman refused the sexual advances of her foreman and because of this found herself dismissed, she was accorded a cause of action for breach of contract.n35 Such cases are often classified under the title of a ''public policy'' exception to the at-will employment rule.n36 Some of these courts have spoken of a tort of abusive discharge;n37 the characterization of this kind of discharge as tortious represents muddled analysis, but has the practical effect of being, in some jurisdictions, a predicate for punitive damages.n38

Of course, hirings are not at will if the parties have agreed upon a definite term of employment.n39 A recent spate of cases has arisen concerning employment contracts of indefinite duration but where personnel manuals indicated certain procedural protections for employees or provide that employees will not be terminated except for cause. These manuals, to the extent they make promises, are generally treated as offers to unilateral contracts.n40 Indeed, this is the same analysis as applies to fringe benefits such as pensions. Despite certain resistance to the application somewhat elementary and basic principles of contract law, many courts have given effect to these contracts.n41 Where the manual or a written disclaimer explicitly states that the manual forms no part of the employment contract or that it is not binding, courts generally,n42 but not alwaysn43 have held that it is not contractual. The resistance seems to stem from the notion that anything but at-will employment is anomalous. Yet when one considers the job protection given to workers under collective bargaining agreements, legislation concerning public employees, and tenure policies at universities, procedural guarantees for workers pursuant to voluntarily established company procedures seem not at all deviant.

Although an agreement is not a contract, it is not totally inoperative. In many cases, such an agreement is an operative offer that can be accepted by rendering all, or some indicated portion, of the service or other performance agreed upon. Such a rendition of performance, before any notice of revocation, binds the other party to pay the specified compensation.n44 If the party rendering performance has made no promise of any other performances, either expressly or tacitly, the contract now created is a unilateral contract. Often, however, it would be reasonable to find a promise, tacit if not express, to complete a performance begun or to render some other collateral performance. In such case, the rendering of part performance may create a bilateral contract. In addition and instead, substantial acts of reliance on a promise of indefinite duration should be redressed under the doctrine of promissory estoppel.n45

There is no doubt that indefiniteness of terms of an agreement is a factor that will be given some weight, even though standing alone it would not be decisive. It may be the factor that is chiefly stressed in a judicial opinion, in a case that involved elements of unfairness or fraud or disloyalty. Where no such elements exist, and the employee has so greatly changed position that a more limited remedy is inadequate, the court is more ready to fill gaps by liberal interpretation and by inferences from the performances already rendered.

No matter what the contractual relation, an employee may be fired for ''just cause,'' which in the case of an employment contract for a specific term simply means that if the employee materially breaches the contract, a constructive condition has failed, and the employer may cancel the contract.n46 In the case of a contract for an indefinite term that is terminable only ''for cause,'' its meaning may be quite different.n47

Legal Topics:

For related research and practice materials, see the following legal topics:

Contracts LawContract InterpretationParol EvidenceCustom & UsageLabor & Employment LawEmployment RelationshipsAt-Will EmploymentDuration of EmploymentContracts LawContract InterpretationParol EvidenceCourse of DealingContracts LawFormationDefinite TermsContracts LawPerformanceDischarges & Terminations

FOOTNOTES:

(n1)Footnote 1. See § 2.14 above.

(n2)Footnote 2.

U.S. - Automatic Sprinkler Co. v. Sherman, 294 Fed. 533 (5th Cir.1923) , to install apparatus, seller ''promises no time for performance''; Eastern Brass & Copper Co. v. General Elec. Supply Corp., 101 F.Supp. 410 (S.D.N.Y.1951) , implication of a promise to deliver within a reasonable time.

Mass.-This section is cited in Miller v. Campello Co-operative Bank, 344 Mass. 76, 181 N.E.2d 345 (1962) . In 1935, the plaintiff entered into a written contract to purchase a house and lot from the defendant bank. The agreed price was $2,800, payable at the rate of $30 per month, the installments to be applied to payment of interest (at 6%), to taxes and assessments, and balance to the principal. The defendant agreed to execute a deed of conveyance when the principal was reduced to $2,400, receiving back a mortgage for that amount at 6% interest. The installments were sufficient to reduce the principal to $2,685, but at that time the taxes had so greatly increased as to exceed the monthly installments. The court held that this was not a case for reformation; but it rendered a decree determining the rights of the parties. The plaintiff had already occupied the premises for 27 years, paying the agreed $30 per month, and had made some improvements. There was no prospect that taxes would grow less, but the plaintiff was not entitled to enjoy possession at $30 per month for an interminable period. The plaintiff was given 30 days within which to pay in cash the taxes and assessments paid by the bank in excess of the installments received and applied thereto since 1935, and either to pay the principal sum of $2,685 or tender a mortgage for that amount with interest at 6%. On compliance by the plaintiff, the bank must execute a deed of conveyance, but on noncompliance, the plaintiff must vacate. In 1935, the parties had no conception of the subsequently occurring inflation and taxation, and the express provision fixing the time for conveyance with mortgage back would produce, if literally applied, a grossly inequitable result. See also notes under § 2.16; § 4.1; § 553. Cohen v. Wintman, 236 Mass. 471, 128 N.E. 778 (1920) , reasonable time to transmit money to Russia and obtain bank book for rubles.

N.J. - West Caldwell v. Caldwell, 26 N.J. 9, 138 A.2d 402 (1958) , holding that a contract between two boroughs for the use by one of a sewage system built by the other, with no stated time limit, did not operate in perpetuity, citing this section. See note on this case under § 553.

N.Y. -In Haines v. New York, 41 N.Y.2d 769, 396 N.Y.S.2d 155, 364 N.E.2d 820 (1977) , the City of New York had entered into a contract with an upstate municipality whereby New York City endeavored to protect its upstate water supply from local pollution. The City agreed to construct a described sewage plant and system to process local sewage before its flow into the water supply system. In time, the demands on the plant exceeded its capacity, and the City refused to allow new hookups into its sewage system. One of a number of issues was, what was the duration of the City's obligation to process upstate sewage? Among the possibilities was that the obligation was terminable at will, was perpetual, or endured for a reasonable time. The last of these possibilities was approved by the court. See also, Jafari v. Wally Findlay Galleries, 741 F.Supp. 64 (S.D.N.Y.1990) (sale of goods; price must be tendered within a reasonable time).

In Silverman v. Alpart, 282 A.D. 631, 125 N.Y.S.2d 602 (1953) , a contract for sale of land provided for delivery of possession ''on or before June 1'', but also that closing and possession depended on removal of a building on or before that date, and that the price should be reduced a stated amount month by month until the building should be removed. The building was not removed and the purchaser sued for specific performance five months after June 1. This relief was granted, the court finding ''by implication'' that the vendor had promised to convey by June 1 or within a ''reasonable time'' thereafter.

S.D. - Huffman v. Shevlin, 76 S.D. 84, 72 N.W.2d 852 (1955) , indefinite home-drawn contract by the buyer of machines to pay for them as they were resold to third parties, no time being specified, was held to make it the buyer's duty to pay after the expiration of a reasonable time within which to effect a resale.

See also note under § 641.

Vt. - Greene v. Rainbow Properties, Ltd., 145 Vt. 576, 496 A.2d 178 (1985) . In July, the tenant took occupancy and soon thereafter asked the landlord to substitute overhead blowers for baseboard radiators. The landlord agreed, apparently without consideration, but this point was not discussed, and ordered the blowers. On August 8, the tenant told the landlord that no rent would be paid until the blowers were installed. Whereupon the landlord canceled the order for blowers and sought to evict the tenant. It was held that the landlord had a reasonable time in which to install the blowers and tenant by withholding rent prematurely was in material breach of the lease, justifying eviction. See also Hayden v. Hoadley, 94 Vt. 345, 111 A. 343 (1920) , reasonable time to complete repairs on a house.

Wash. - Merchants' Bank of Canada v. Sims, 122 Wash. 106, 209 P. 1113 (1922) , to extend credit up to a certain amount from time to time.

An engineer promised to supply services ''as required and as you may direct.'' By implication, his duty was conditional on a notice of instructions with a reasonable time thereafter to render the performance. Giffels & Vallet, Inc. v. Edw. C. Levy Co., 337 Mich. 177, 58 N.W.2d 899 (1953) .

(n3)Footnote 3. Kwik-Lok Corp. v. Pulse, 41 Wash.App. 142, 702 P.2d 1226 (1985) . The promise, for a consideration, stated: ''We hereby grant you two (2) free breedings a year to Canadian Gil and two (2) free breedings a year to Drum Fire.'' These were both stallions. The trial judge erred in refusing to admit parol evidence concerning the intended duration of these rights.

Balon v. Hotel & Restaurant Supplies, Inc., 103 Ariz. 474, 445 P.2d 833 (1968) . The parties silence as to the time for their performances raises certain presumptions, but these may be rebutted as to evidence of their actual expressed intent.

See § 593 below.

(n4)Footnote 4. In Hall v. Hall, 158 Tex. 95, 1 Tex.Sup.Ct.Jour. 108, 308 S.W.2d 12 (1957) , rehearing of cause overruled, the court held that such a contract was within the one year clause of the statute of frauds, because the jury found that the reasonable time for performance was 3 years. See note on this case under § 446. The decision should be otherwise if the term ''reasonable time'' is given the second of the above meanings-the meaning that should usually be given. See notes under §§ 446, 684.

A group annuity policy provided that the insurer would pay an annuity, on specified terms, to an employee of the promisee employer who might apply for coverage and for whom the required premium should be paid. This was held to be an irrevocable unilateral contract, giving to the promisee a continuing option to purchase annuities for its employees. The contract did not specify any time for the expiration of the insurer's promissory duty or of the promisee's continuing option. The court held that the duty of the insurer and the power of the insured would not continue forever, but would be limited by the law to a reasonable time. In determining this time, holding it to be 20 years, the court considered, not only the provisions of the contract as to an increase of premiums, but also new and changing conditions such as the decline in interest rates and the increase in life expectancy. Freeport Sulphur Co. v. Aetna Life Ins. Co., 206 F.2d 5, 41 A.L.R.2d 762 (5th Cir.1953) .

(n5)Footnote 5. U.C.C. § 2-310(a).

(n6)Footnote 6. See, e.g., McKinney's-New York Labor Law § 191 ''Frequency of payments'' and § 191-b ''Contracts with sales representatives.''

(n7)Footnote 7. Uniform Commercial Code § 2-309(2) provides: ''The time for shipment or delivery or any other action under a contract if not provided in this Article or agreed upon shall be a reasonable time.''

See, for example, Lightcap v. Keaggy, 128 Pa.Super. 348, 194 A. 347 (1937) , a case in which the indefiniteness of terms would seem to be insufficient reason, standing alone, for refusal of enforcement. Also, Magna Oil & Refining Co. v. Parkville Oil Corp., 1923 OK 1084, 96 Okla. 157, 221 P. 65 (1923), and Newspaper Readers Service, Inc. v. Canonsburg Pottery Co., 146 F.2d 963 (3d Cir.1945) .

In Atlantic Terra Cotta Co. v. Chesapeake Terra Cotta Co., 96 Conn. 88, 113 A. 156 (1921) , the court said: ''although neither the offer nor the acceptance contained any express intent as to the time of delivery or payment, yet in such case, the absence of the ordinary stipulations as to time of delivery and time of payment would be supplied by implication of law. Where no time for delivery is fixed by such a contract, the law implies delivery within a reasonable time. Where no time of payment is fixed, the law implies that the time of payment is upon the delivery of the goods.'' See also:

Conn. - Santoro v. Mack, 108 Conn. 683, 689, 145 A. 273 (1929) ; Soper v. Tyler, 73 Conn. 660, 49 A. 18 (1901) .

An agreement for the manufacture and sale of goods ''to be shipped as specified'' does not leave the time of performance wholly discretionary. Both shipment and specification are to be within a reasonable time. Doehler Die Casting Co. v. Correct Measure Co., 307 Pa. 187, 160 A. 772 (1932) .

(n8)Footnote 8. In Memphis Furniture Mfg. Co. v. Wemyss Furniture Co., 2 F.2d 428 (6th Cir.1924) , the buyer ordered special articles on a rising market, with full information that the seller had many prior orders yet to fill. The agreement stated, ''Due to the uncertainty of manufacturing, this order is accepted subject to prices in effect on shipping date, and our ability to ship.'' The buyer was satisfied with this, permitted manufacture to begin, and later requested and obtained delay in the time for delivery. There was a valid contract for delivery within a reasonable time at the market prices then prevailing.

(n9)Footnote 9. Zidell Explorations, Inc. v. Conval International, Ltd., 719 F.2d 1465, 1983-2 Trade Cas. (CCH) P65706 (9th Cir.1983) (reasonable period of notice of termination).

(n10)Footnote 10. Elks v. North State Life Ins. Co., 159 N.C. 619, 75 S.E. 808 (1912) , promise to make a loan without specifying date of repayment or the security to be given.

McErlean v. Union National Bank of Chicago, 90 Ill.App.3d 1141, 46 Ill.Dec. 406, 414 N.E.2d 128 (1980) , duration of line-of-credit, interest rate, and duration of contemplated loans were all missing.

If the money is actually advanced it must be repaid within a reasonable time after demand, even though the signed note provided for repayment ''when payor and payee shall mutually agree,'' if the borrower refuses to assent to a reasonable time. Page v. Cook, 164 Mass. 116, 41 N.E. 115 (1895) .

(n11)Footnote 11. Such data existed in Camden v. South Jersey Port Com., 2 N.J.Super. 278, 63 A.2d 552 (1948) , modified, 4 N.J. 357, 73 A.2d 55 , where the court held that the City was bound to advance the money and that the Port Commission had promised to repay it when able, out of funds that according to its honest and reasonable judgment were not required for certain other purposes.

(n12)Footnote 12. Carrico v. Delp, 141 Ill.App.3d 684, 95 Ill.Dec. 880, 490 N.E.2d 972 (1986) .

(n13)Footnote 13. In Helsby v. St. Paul Hospital & Cas. Co., 195 F.Supp. 385 (D.Minn.1961) , aff'd, 304 F.2d 758 (8th Cir.) , an insurance agent's commission contract was for an indefinite period, but it was terminable only ''with cause'' by giving 12 months written notice. The provision for termination was not rendered too indefinite by the fact that the meaning and coverage of the word ''cause'' was not spelled out. The court sustained an instruction to the jury that as used here the term ''cause'' ''is not limited to a 'legal' cause which would justify a rescission of the contract, and it need not be an act or omission on the part of the plaintiff which would constitute a breach of the contract. The provision now under consideration simply protected the plaintiff from an arbitrary or capricious termination of the contract; and the term 'cause', as used by the parties, means anything which has prompted a reasonably prudent insurance company, acting honestly, fairly and in good faith, to put an end to the agency relationship....'' Noted also under § 155; § 165; § 567.

In Ravel v. Hubbard, 112 Cal.App.2d 255, 246 P.2d 88 (1952) , the defendant promised exclusive rights of haulage to the plaintiff as long as the latter maintained specified facilities. The indefiniteness of time did not make the promise unenforceable, inasmuch as the plaintiff had rendered an executed consideration.

(n14)Footnote 14. Cambee's Furniture, Inc. v. Doughboy Recreational, Inc., 825 F.2d 167 (8th Cir.1987) (South Dakota law).

Precursors to U.C.C. § 2-309, that relied on this section of the treatise are well illustrated by J.C. Millett Co. v. Park & Tilford Distillers Corp., 123 F.Supp. 484 (N.D.Cal.1954) , where the court analyzes the facts in great detail and holds that a partly implied and partly express contract for distribution of defendant's products was not too indefinite for enforcement, even though no specific time was fixed for duration of performance or for giving notice to terminate. The court held that the contract required performance for at least one year and a 3 months' notice to terminate. See also § 145, 152, 155, 449, 567.

Another precursor case, but relying on § 155 is C.C. Hauff Hardware, Inc. v. Long Manufacturing Co., 257 Iowa 1127, 136 N.W.2d 276, 19 A.L.R.3d 191 (1965) .

A case similar to the J.C. Millett case noted above is San Francisco Brewing Corp. v. Bowman, 52 Cal.2d 607, 343 P.2d 1 (1959) . By reason of a long course of dealing between the parties to a beer distributorship contract, the court found that the Brewing Co. had promised by implication that the agency relation should continue for a reasonable time, and the jury found that such reasonable time was three years. The court held that this finding brought the contract within the one year clause of the statute of frauds, a holding that is criticized herein under § 446. See also note 4 above and note under § 568.

This section is cited in Simons v. American Dry Ginger Ale Co., 335 Mass. 521, 140 N.E.2d 649 (1957) . The defendant offered to supply ''a minimum of 400 cases per week'' (for repair) and would pay 35 cents per case. The plaintiff accepted. This was held not too indefinite for enforcement. Each party could terminate by giving reasonable notice. Until such notice the defendant was liable in damages for failure to supply at least 400 cases per week.

As to the burden of proof in these cases, see Circo v. Spanish Gardens Food Mfg. Co., 643 F.Supp. 51, 55 (W.D.Mo.1985) . ''In the present case there is no proof concerning whether alternate sources of supply were available, how much time would have been involved in implementing any such alternate sources, or what plaintiffs' efforts in those connections might have been. In fact, the only evidence even touching the point is that plaintiffs had always been free to buy or distribute the products of other manufacturers, and indeed had done so. Whether any of these products were substitutable for defendants' products, and were readily available, is unknown; but that certainly does not translate into affirmative evidence which supports a finding of injury.''

It has been held, however, that a termination without advance notice is per se a breach of the duty imposed by U.C.C. § 2-309. Jo-Ann, Inc. v. Alfin Fragrances, Inc., 731 F.Supp. 149 (D.N.J.1989) . This may not be contrary to the case in the previous paragraph as the context of the quotation was focused on proof of damages. Indeed, evidence of lack of harm caused by an abrupt termination indicates that a reasonable period of notice can be very short. Teitelbaum v. Hallmark Cards Inc., 25 Mass.App.Ct. 555, 520 N.E.2d 1333 (1988) .

(n15)Footnote 15. McGinnis Piano & Organ Co. v. Yamaha International Corp., 480 F.2d 474 (8th Cir.1973) .

Bak-A-Lum Corp. of America v. Alcoa Bldg. Products, Inc., 69 N.J. 123, 351 A.2d 349 (1976) .

(n16)Footnote 16. E.g., Automobile Dealers Day in Court Act, 15 U.S.C.A. § 1222; Petroleum Marketing Practices Act, 15 U.S.C.A. § 2810-2841. There are particularized state statutes as well.

(n17)Footnote 17.

Ark. - Nakdimen v. Atkinson Improv. Co., 149 Ark. 448, 233 S.W. 694 (1921) .

Conn. - Karn v. Di Lorenzo, 95 Conn. 267, 111 A. 195 (1920) .

Ga. - Thornton v. Ellis, 184 Ga.App. 884, 363 S.E.2d 584 (1987) ; Saunders v. Sasser, 86 Ga.App. 499, 71 S.E.2d 709 (1952) .

Ky. - Raff v. Freiberg, 207 Ky. 246, 268 S.W. 1110 (1925) .

Mass. - Gardella v. Greenburg, 242 Mass. 405, 136 N.E. 106, 26 A.L.R. 1411 (1922) .

Mo. - Davison v. Rodes, 299 S.W.2d 591 (Mo.App.1956) , a lease provided that the ''Lessor grants an option to release premises to Lessee on expiration of this lease.''

Va. - King v. Wilson, 98 Va. 259, 35 S.E. 727 (1900) .

Wis. - Fergen v. Lyons, 162 Wis. 131, 155 N.W. 935 (1916) .

See Eagle-Picher Co. v. Mid-Continent Lead & Zinc Co., 209 F.2d 917 (10th Cir.1954) , noted herein under § 553, ''Promises of Performance Without a Time Limit,'' interpreting a joint adventure contract between two lessees, with no provision as to termination.

In Farber v. Dewey-Davis Estate, Inc., 83 Idaho 394, 364 P.2d 173 (1961) , an option contract for a long term lease of ground on which the lessee intended to erect buildings was not too indefinite for specific enforcement, even though it provided: ''A suitable lease agreement of standard provisions acceptable to both parties for bank financing to be drawn upon acceptance of said option.'' See also § 1174.

(n18)Footnote 18.

Mich. - Starr v. Holck, 318 Mich. 452, 28 N.W.2d 289, 172 A.L.R. 413 (1947) .

Cf. N.Y.- 58-59 Realty Corp. v. Park Cent. Valet, 252 A.D. 72, 297 N.Y.S. 40 (1937).

(n19)Footnote 19. Payne v. Western & A.R. Co., 81 Tenn. 507, 519-20 (1884) .

(n20)Footnote 20. This section is quoted (also § 152) in Bixby v. Wilson & Co., 196 F.Supp. 889, 898 (N.D.Iowa 1961) . A promise of ''permanent employment'' was held, under Iowa law, to be too indefinite for enforcement, under conditions of considerable hardship. See note under § 152.

Morsinkhoff v. DeLuxe Laundry & Dry Cleaning Co., 344 S.W.2d 639 (Mo.App.1961) , oral agreement of employment at a stated salary, to begin June 6, for an indefinite period, terminable at will; employer not liable in damages for repudiating prior to June 6, even though employee gave up his former job in reliance. Compare Seymour v. Oelrichs, 156 Cal. 782, 106 P. 88 (1909) , noted under § 459.

In Degen v. Investors Diversified Services, Inc., 260 Minn. 424, 110 N.W.2d 863 (1961) , defendant's encouraging assurances ''fall far short of establishing a lifetime contract.''

(n21)Footnote 21.

Ala. - Dalton v. University of Alabama, 591 So.2d 93 (Ala.Civ.App.1991) .

N.Y. - Martin v. New York Life Ins. Co., 148 N.Y. 117, 42 N.E. 416 (1895) . See § 684.

(n22)Footnote 22. Rowe v. Montgomery Ward & Co., 437 Mich. 627, 473 N.W.2d 268 (1991) , noted in 1992 Det.C.L.Rev. 119.

(n23)Footnote 23. In many cases, a contract for ''permanent'' employment has been held, in the absence of other expressions showing that the intention was for ''life'' or for the duration of a business, to be terminable at will:

Cal. - Siddoway v. Bank of America, 748 F.Supp. 1456 (N.D.Cal.1990) (employment described in writing as permanent, but providing for dismissal without cause on two weeks' notice); Lord v. Goldberg, 81 Cal. 596, 22 P. 1126 (1889) .

Ga. - Bentley v. Smith, 3 Ga.App. 242, 59 S.E. 720 (1907) .

Iowa - Faulkner v. Des Moines Drug Co., 117 Iowa 120, 90 N.W. 585 (1902) .

Mass. - Phelps v. Shawprint, Inc., 328 Mass. 352, 103 N.E.2d 687 (1952) , for services performed, promise to pay $100 per month as long as promisor should be connected with a corporation.

Minn. - Skagerberg v. Blandin Paper Co., 197 Minn. 291, 266 N.W. 872 (1936) ; Bolles v. Sachs, 37 Minn. 315, 33 N.W. 862 (1887) .

Miss. - Rape v. Mobile & O.R. Co., 136 Miss. 38, 100 So. 585, 35 A.L.R. 1422 (1924) , ''steady and permanent'' employment held too indefinite, but there was strong dissent.

Mo. - Minter v. Tootle-Campbell Dry Goods Co., 187 Mo.App. 16, 173 S.W. 4 (1914) .

Neb. - Mau v. Omaha Nat. Bank, 207 Neb. 308, 299 N.W.2d 147 (1980) .

N.Y. - Arentz v. Morse Dry Dock & Repair Co., 249 N.Y. 439, 164 N.E. 342 (1928) .

N.C. - Roberts v. Wake Forest Univ., 55 N.C.App. 430, 286 S.E.2d 120 (1982) , review denied, 305 N.C. 586, 292 S.E.2d 571 (1982) .

Pa. - Hogle v. De Long Hook & Eye Co., 248 Pa. 471, 94 A. 190 (1915) .

Eng. - Elderton v. Emmens, 4 C.B. 479 (1847) .

Atlas Brewing Co. v. Huffman, 217 Iowa 1217, 252 N.W. 133 (1933) , held that an agency contract on commission basis was not too indefinite for enforcement merely because it was terminable on reasonable notice.

Crossland v. Kentucky Blue Grass Seed Growers' Co-op Ass'n, 103 F.2d 565 (6th Cir.1939) is another instructive case, the contract being held valid even though it was for indefinite part-time service the duration of which was not specified.

An agreement between two insurance agents that each would continue to solicit a specific prospect, and to divide the commission on any policy that either one might procure, is not invalid merely because no time limit is specified. The two will be bound for a reasonable time, which will not be less than their own subsequent conduct shows that they contemplated. Albright v. Hughes, 107 Ind.App. 651, 26 N.E.2d 576 (1940) .

In Stevens v. G.L. Rugo & Sons, 209 F.2d 135 (1st Cir.1953) , the defendant promised the plaintiff a ''permanent'' position as a quantity surveyor and estimator. In reliance, the plaintiff moved with his family from Trinidad to Boston. After two months he was discharged. The court held that the promise was not too indefinite for enforcement. Employment was not at will but for ''as long as there was work to do and each party was satisfied'' but not subject to whim or caprice. See also § 152; § 684.

(n24)Footnote 24.

Iowa - Benishek v. Cody, 441 N.W.2d 399 (Iowa App.1989) .

Md. - Baltimore & O.R. Co. v. King, 168 Md. 142, 176 A. 626 (1935) ; Heckler v. Baltimore & Ohio R. Co., 167 Md. 226, 173 A. 12 (1934) .

Miss. - Ingram-Day Lumber Co. v. Rodgers, 105 Miss. 244, 62 So. 230 (1913) .

N.J. - Bird v. J.L. Prescott Co., 89 N.J.L. 591, 99 A. 380 (1916) , a life job. An agreement for ''permanent'' employment was held to be too indefinite in Savarese v. Pyrene Mfg. Co., 9 N.J. 595, 89 A.2d 237 (1952) . The contract was held to be terminable at will, with the employer bound to pay the agreed rate for services received. It would have been otherwise if the employer had made the identical promise in exchange for an executed consideration.

Pa. - Seiss v. McClintic-Marshall Corp., 324 Pa. 201, 188 A. 109 (1936) ; but see Greene v. Oliver Realty, Inc., 363 Pa.Super. 534, 526 A.2d 1192 (1987) , appeal denied, 517 Pa. 607, 536 A.2d 1331 , a ''lifetime'' case, but the court has a penetrating discussion of ''permanent'' and ''lifetime'' employment.

Term of service may be fixed by implication. See § 3.16, 567 and 684.

An employment contract that does not state the length of service may be terminable at will, but ''implications'' arise from special circumstances indicating an agreement for continued performance for a ''reasonable time'' or for a time to be determined by special circumstances. This problem is considered in § 684, Interpretation of Service Contracts-Term of Service.

(n25)Footnote 25.

Ill. - Tolmie v. United Parcel Service, Inc., 930 F.2d 579 (7th Cir.1991) . Employee had a secure union job with defendant. When the employer offered him a management position he was assured that he need not worry about job security as ''it is harder to fire management than other employees.'' This did not amount to a promise of job security. Also, his surrender of his union job was not additional consideration for the promise as it was not bargained for as part of an exchange.

Md. - Page v. Carolina Coach Co., 667 F.2d 1156 (4th Cir.1982) . Facts almost identical to Tolmie, supra.

Mich. - Enos v. J.C. Penney Co., 769 F.Supp. 239 (W.D.Mich.1990) , aff'd, 940 F.2d 659 (6th Cir.) . Plaintiff asked for three successive weeks of vacation. The request was denied and two consecutive weeks were allotted to her. She was warned that if she ''did not return to work as scheduled the week of July 16, 1988, without good cause she would be terminated.'' This threat did not amount to a promise to retain her as an employee if she could show a medical reason for remaining away from work. See further, Rowe v. Montgomery Ward & Co., 437 Mich. 627, 473 N.W.2d 268 (1991) .

Wash. - Siekawitch v. Washington Beef Producers, 58 Wash.App. 454, 793 P.2d 994 (1990) . During the initial employment interview, the Chief Executive Officer told the plaintiff, if he did his job he would stay and advance. These words of assurance were held not to be contractual promises. A personnel manual was given a very narrow interpretation. See also Smoot v. Boise Cascade Corp., 942 F.2d 1408 (9th Cir.1991) .

(n26)Footnote 26.

U.S. - Pierce v. Tennessee Coal, Iron & R. Co., 173 U.S. 1, 19 S.Ct. 335, 43 L.Ed. 591 (1899) .

Ala. - United Sec. Life Ins. Co. v. Gregory, 281 Ala. 264, 201 So.2d 853 (1967) .

Ark. - St. Louis, I.M. & S.R. Co. v. Morgan, 107 Ark. 202, 154 S.W. 518 (1913) .

Ill. - Farr v. Continental White Cap, Inc., 774 F.Supp. 522 (N.D.Ill.1991) , forgoing other employment opportunities not consideration.

Ind. - Pennsylvania Co. v. Dolan, 6 Ind.App. 109, 32 N.E. 802 (1892) , discharge of a claim for damages.

Iowa - Collins v. Parsons College, 203 N.W.2d 594, 60 A.L.R.3d 218 (Iowa 1973) .

Ky. - Louisville & N.R. Co. v. Cox, 145 Ky. 667, 141 S.W. 389 (1911) , release of claim for injuries.

Mass. - Carnig v. Carr, 167 Mass. 544, 46 N.E. 117 (1897) , promisee discontinued former business.

Mo. - Harrington v. Kansas C.C.R. Co., 60 Mo.App. 223 (1895) .

N.C. - Burkhimer v. Gealy, 39 N.C.App. 450, 250 S.E.2d 678 (1979) , cert. denied, 297 N.C. 298, 254 S.E.2d 918 ; Humphrey v. Hill, 55 N.C.App. 359, 285 S.E.2d 293 (1982) .

Pa. - Cashdollar v. Mercy Hospital of Pittsburgh, 406 Pa.Super. 606, 595 A.2d 70 (1991) (implied promise of performance for a reasonable time, employee gave up secure job, uprooted family); Bergstein v. Jordache Enterprises, Inc., 767 F.Supp. 535 (S.D.N.Y.1991) , sales representative invested $200,000 of his own money to increase his customer base.

In Fisher v. John L. Roper Lumber Co., 183 N.C. 485, 111 S.E. 857 (1922) , a promise to employ plaintiff for life at such service as he should be able to do, paying him ''a living wage sufficient for support of himself and family'' was held to be legally enforceable. And in Jones v. Carolina Power & Light Co., 206 N.C. 862, 175 S.E. 167 (1934), where the plaintiff was induced to give up a position in order to help the defendant break a strike, in reliance on a promise of employment for at least ten years, the agreement was held not too indefinite for enforcement, even though the exact kind of service and the wages to be paid were not stated.

W.Va. - Rhoades v. Chesapeake & O. R. Co., 49 W.Va. 494, 39 S.E. 209 (1901) , ''so long as I give satisfaction.''

The promise was held sufficiently definite in F.S. Royster Guano Co. v. Hall, 68 F.2d 533 (4th Cir.1934) . The court said: ''And, upon the principle id certum est quod certum reddi potest, the promise of employment for life was sufficiently definite, as was also the promise of top wages for common labor. The fair meaning of the promise was that defendant would furnish plaintiff employment so long as he might live at the highest rate of wages which it paid for common labor, with the implied provisos that he perform the work assigned him satisfactorily and that defendant continue in business.''

There was nothing indefinite or uncertain where an engineer retired at the age of 67 and was promised the sum of $125 per month ''for life,'' in return for which he promised to hold himself ready to serve as consulting engineer when requested, being free to engage in other employment not inconsistent with so serving. The period ''for life'' was definite, the amount payable was specified. The promise to serve as ''consulting engineer'' as requested was not made insufficient as a consideration by the fact that the employer had the option of requesting or not as he saw fit. Abbott v. Arkansas Utilities Co., 165 F.2d 339 (8th Cir.1948) . Other cases ''for life'' are Eggers v. Armour & Co., 129 F.2d 729 (8th Cir.1942) and Gerard B. Lambert Co. v. Fleming, 169 Ark. 532, 275 S.W. 912 (1925) .

In Ireland v. Charlesworth, 98 N.W.2d 224 (N.D.1959) , at the request of a majority stockholder and in reliance on her promise of a stock option, an air force officer resigned his position and entered into the employ of a Lumber Company. He made no promise to remain in such employ, but his right to the option was conditional on his remaining and qualifying himself for the position of general manager. This was held to be sufficiently definite for enforcement, so that he had a right to damages for being discharged, thus making it impossible for him to fulfill the condition. See also notes under § 152, 153, 767.

(n27)Footnote 27. Buschmeyer v. Advance Machinery Co., 27 Ohio C.A. 337, 7 Ohio App. 202, 29 Ohio Cir. Dec. 207, 27 Ohio C.C. (n.s.) 337 (1916) , motion overruled, held that a promise of permanent employment at a stated salary, the employee buying shares in the company and changing his home, was not too indefinite for enforcement by compelling restitution of the price of the shares when discharged before a reasonable time has expired.

(n28)Footnote 28. Martin v. Federal Life Ins. Co., 109 Ill.App.3d 596, 65 Ill.Dec. 143, 440 N.E.2d 998 (1982) .

(n29)Footnote 29. Although ''lifetime'' is a definite enough term, promises of lifetime employment are sometimes fatally vague as to other terms. For example, a founding member of a corporation alleges he was promised he ''would be employed by the corporation as long as the corporation was viable....'' In exchange he transferred the rights to an important and valuable software system he had created. The court finds the employment agreement to be indefinite because neither duties nor wages were discussed or agreed upon. Yost v. Early, 87 Md.App. 364, 589 A.2d 1291 (1991) , cert. denied, 324 Md. 123, 596 A.2d 628 . See also Alter v. Resorts International, Inc., 234 N.J.Super. 409, 560 A.2d 1290 (1989) . Other reasons for non-enforcement include the absence of consideration, as where the employee never expressly or impliedly promises to remain in the promisor's employ ( Savarese v. Pyrene Manufacturing Co., 9 N.J. 595, 89 A.2d 237 (1952)) , and lack of authority of the promisor to bind the employer to such an unusual contract ( Alter v. Resorts International, Inc., supra ). A statement by a former supervisor, ''You do us a good job, do your work, and we'll see that you are employed by Middletown Hospital as long as you do your work,'' did not create a contract for lifetime employment. Moore v. Middletown Reg. Hosp., 1987 Ohio App. LEXIS 7638 (Ohio App. 1987). See also Boggs v. Avon Products, Inc., 56 Ohio App.3d 67, 564 N.E.2d 1128 (1990) .

(n30)Footnote 30. ''Forever,'' is definite enough, but is generally held to be within the statute of frauds. Roberts v. Southern Wood Piedmont Co., 571 F.2d 276 (1978) , contract to supply crossties.

(n31)Footnote 31. See Roberts v. Southern Wood Piedmont Co., 571 F.2d 276 (5th Cir.1978) ; Arentz v. Morse Dry Dock & Repair Co., 249 N.Y. 439, 164 N.E. 342 (1928) ; Greene v. Oliver Realty, Inc., 363 Pa.Super. 534, 526 A.2d 1192 (1987) , appeal denied, 517 Pa. 607, 536 A.2d 1331 ; Minter v. Tootle-Campbell D.G. Co., 187 Mo.App. 16, 173 S.W. 4 (1915) . But see Murphy v. Publicker Industries, Inc., 357 Pa.Super. 409, 516 A.2d 47 (1986) , holding that, as a matter of law, ''lifetime'' is an indefinite period.

In Thompson v. Miller, 251 Iowa 324, 100 N.W.2d 410 (1960) a distributorship contract, partly written and partly oral, contained neither ''permanent'' nor ''for life''; but the court held that there was evidence sufficient to go to the jury supporting the plaintiff's contention that it was ''for life.'' The case is noted herein under § 684.

In Rancourt v. Waterville Osteopathic Hospital, 526 A.2d 1385 (Me.1987) , plaintiff's supervisor allegedly promised her she could have her job for ''as long as she wanted.'' There was no evidence that the supervisor had authority to contract, therefore summary judgment against plaintiff was proper.

(n32)Footnote 32. E.g., Kouff v. Bethlehem-Alameda Shipyard, Inc., 90 Cal.App.2d 322, 202 P.2d 1059 (1949) , statute prohibiting discharge for serving as an election officer.

(n33)Footnote 33.

Ind. - Frampton v. Central Indiana Gas Co., 260 Ind. 249, 297 N.E.2d 425, 63 A.L.R.3d 973 (1973) .

Ill. - Kelsay v. Motorola, Inc., 74 Ill.2d 172, 23 Ill.Dec. 559, 384 N.E.2d 353 (1978) .

N.J. - Cerracchio v. Alden Leeds, Inc., 223 N.J.Super. 435, 538 A.2d 1292, 75 A.L.R.4th 1 (1988) .

W.Va. - Shanholtz v. Monongahela Power Co., 165 W.Va. 305, 270 S.E.2d 178 (1980) .

Kelly v. Mississippi Valley Gas Co., 397 So.2d 874, 32 A.L.R.4th 1214 (Miss.1981) is contra.

(n34)Footnote 34. This is sometimes accomplished by characterizing the discharge as a breach of the covenant of good faith and fair dealing. Ray v. Nampa School Dist. # 131, 120 Idaho 117, 814 P.2d 17 (1991).

(n35)Footnote 35. Monge v. Beebe Rubber Co., 114 N.H. 130, 316 A.2d 549, 62 A.L.R.3d 264 (1974) .

(n36)Footnote 36. Palmateer v. International Harvester Co., 85 Ill.2d 124, 52 Ill.Dec. 13, 421 N.E.2d 876 (1981) , appeal after remand, 140 Ill.App.3d 857, 95 Ill.Dec. 253, 489 N.E.2d 474 ; employee was discharged for providing authorities with information concerning criminal conduct of a fellow employee. The court explains the public policy exception in this context as follows: ''Although there is no precise line of demarcation dividing matters that are the subject of public policies from matters purely personal, a survey of cases in other States involving retaliatory discharges shows that a matter must strike at the heart of a citizen's social rights, duties and responsibilities before the tort will be allowed. Thus actions for retaliatory discharge have been allowed where the employee was fired for refusing to violate a statute. Examples are: for refusing to commit perjury ... for refusing to engage in price fixing ... for refusing to violate a consumer credit code ... for refusing to practice medicine without a license... It has also been allowed where the employee was fired for refusing to evade jury duty ... for engaging in statutorily protected union activities .. and for filing worker's compensation statute... The action has not been allowed where the worker was discharged in a dispute over a company's internal management system ... where the worker took too much sick leave ... where the worker tried to examine the company's books in the capacity of a shareholder ... where the worker impugned the company's integrity ... where the worker refused to be examined by a psychological-stress evaluator ... where the worker was attending night school ... or where the worker improperly used the employer's Christmas fund. The cause of action is allowed where the public policy is clear, but is denied where it is equally clear that only private interests are at stake. Where the nature of the interest at stake is muddled, the courts have given conflicting answers as to whether the protection of the tort action is available.'' (Citations omitted). 421 N.E.2d at 878-79.

Colo. - Martin Marietta Corp. v. Lorenz, 823 P.2d 100 (Colo.1992) , as modified on denial of rehearing.

D.C. - Gray v. Citizens Bank of Washington, 602 A.2d 1096 (D.C.App.1992) (follows the distinction made in Texas, below).

N.J. - Pierce v. Ortho Pharmaceutical Corp., 84 N.J. 58, 417 A.2d 505, 12 A.L.R.4th 520 (1980) , recognizes the rule but finds no violation; Cerracchio v. Alden Leeds, Ltd., 223 N.J.Super. 435, 538 A.2d 1292, 75 A.L.R.4th 1 (1988) , retaliation for filing a worker's compensation claim and reporting safety conditions to OSHA.

N.Mex. - Sanchez v. The New Mexican, 106 N.M. 76, 738 P.2d 1321 (1987) .

N.D. - Ressler v. Humane Soc. of Grand Forks, 480 N.W.2d 429 (N.D.1992) .

Okla. - Smith v. Farmers Co-op. Assoc., 1992 OK 11, 825 P.2d 1323 (Okl.App.1992) . Employee of the co-op was also acting mayor. In the latter capacity he denied a zoning variance to a director of the co-op, for which act he was fired.

Pa. - Bergstein v. Jordache Enterprises, Inc., 767 F.Supp. 535 (S.D.N.Y.1991) ; Smith v. Calgon Carbon Corp., 917 F.2d 1338 (3d Cir.1990) , cert. denied, 111 S.Ct. 1597 , reh'g denied, 111 S.Ct. 2843 .

Tex. - Winters v. Houston Chronicle Pub. Co., 795 S.W.2d 723 (1990) . Public policy exception is limited to discharge for refusal to engage in criminal activity or where discharge is prohibited by a statute. Discharges for ''whistle-blowing'' are not actionable.

Some states have refused to find a public policy exception outside of specific statutory rules prohibiting discharge on specified grounds. According to one recent case, 37 jurisdictions recognize some form of public policy exception, 9 have declined to recognize any, and the rest have not passed on the question. Martin Marietta Corp. v. Lorenz, 823 P.2d 100 (Colo.1992) , as modified on denial of rehearing.

See Note, 96 Harv.L.Rev. 1931 (1983).

(n37)Footnote 37. See Wagenseller v. Scottsdale Memorial Hospital, 119 L.R.R.M. 3166, 147 Ariz. 370, 710 P.2d 1025 (1985) , en banc, where the court states: ''Thus, in an at-will hiring we continue to recognize the presumption or to imply the covenant of termination at the pleasure of either party, whether with or without cause. Firing for bad cause-one against public policy articulated by constitutional, statutory, or decisional law-is not a right inherent in the at-will contract, or in any other contract, even if expressly provided. See 1 A. Corbin, Contracts § 7 [now § 1.7]; 6A A. Corbin, Contracts § 1373-1375 (1962). Such a termination violates rights guaranteed to the employee by law and is tortious. See Prosser & Keeton on Torts § 92 at 655 (5th ed. 1984).'' Except for the last sentence, the language of the court is consistent with sound policy and analysis. The citation to Prosser & Keeton is inapposite. These authors say in § 92, ''the affirmative act of discharging an employee is uniformly considered to be no more than non-performance of the agreement to continue employment.'' Id. at 661-62. The obligation not to discharge for reasons that are inconsistent with public policy does not create tort liability, no more than rules supplying gap fillers to fill in for other missing terms.

Not all courts are in accord as to the public policy exception.

Ala. - Hoffman-La Roche, Inc. v. Campbell, 512 So.2d 725 (Ala.1987) where the court states: ''This court has repeatedly refused to modify this doctrine even so much as to recognize a so-called public policy exception to its application. Thus, we have refused to recognize an exception where an employee had been dismissed for refusing to commit a criminal act, ..., or where an employee had been dismissed because he filed a workmen's compensation claim, ..., or where an employee had been dismissed because he responded to a subpoena for jury duty,....'' 512 So.2d at 728 .

N.Y. - Murphy v. American Home Products Corp., 58 N.Y.2d 293, 461 N.Y.S.2d 232, 448 N.E.2d 86 (1983) , on remand, 134 Misc. 2d 807, 512 N.Y.S.2d 752 , suggesting that the issue be considered by the legislature.

(n38)Footnote 38. Palmateer v. International Harvester Co., 85 Ill.2d 124, 52 Ill.Dec. 13, 421 N.E.2d 876 (1981) , appeal after remand, 140 Ill.App.3d 857, 95 Ill.Dec. 253, 489 N.E.2d 474 .

(n39)Footnote 39.

Pa. - Carlson v. Arnot-Ogden Memorial Hospital, 918 F.2d 411 (3d Cir.1990) , a contract providing for termination on 90 days notice is a contract for 90 days of employment.

S.D. - Larson v. Kreiser's, Inc., 472 N.W.2d 761 (S.D.1991) . Harold repeatedly promised David that one day he would be the president of the family business in which he was employed. Twenty years after his employment started, he was fired. The court held that under such a contract David could only be discharged for good cause.

Tex. - Zep Mfg. Co. v. Harthcock, 824 S.W.2d 654 (Tex.App.1992) . An agreement contained the following termination clause: ''If the president of Zep, in his sole discretion, determines that Employee's performance of duties hereunder is unsatisfactory, Employee's services may be terminated....'' This is not a hiring at will. The president must use a good faith and honest discretion.

(n40)Footnote 40. In re Certified Question, 432 Mich. 438, 443 N.W.2d 112 (1989) has a thorough discussion of the revocability of the offer to a unilateral contract in this context. The usual rule that the offer becomes irrevocable upon part performance by the offeree (§ 2.29 above) may be unworkable in this context.

In Hany v. General Electric Co., 221 Ill.App.3d 390, 163 Ill.Dec. 790, 581 N.E.2d 1213 (1991) , appeal denied, 143 Ill.2d 638, 167 Ill.Dec. 400, 587 N.E.2d 1015 (1992) , it was held that an offer of overtime pay was revocable, but note, such an offer looks to a series of unilateral contracts, not a single contract.

(n41)Footnote 41.

Ala. - Hoffman La-Roche, Inc. v. Campbell, 512 So.2d 725 (Ala.1987) .

Alaska - Zuelsdorf v. University of Alaska, Fairbanks, 794 P.2d 932 (Alaska 1990) , rehearing denied.

Ariz. - Leikvold v. Valley View Community Hospital, 141 Ariz. 544, 688 P.2d 170 (1984) , en banc.

Colo. - Tuttle v. ANR Freight System, Inc., 797 P.2d 825 (Colo.App.1990) ; Salimi v. Farmers Insurance Group, 684 P.2d 264 (Colo.App.1984) .

D.C. - Nickens v. Labor Agency of Metropolitan Washington, 600 A.2d 813 (D.C.App.1991) .

Ga. - Lane v. K-Mart Corp., 190 Ga.App. 113, 378 S.E.2d 136 (1989) is contra. The rule in Georgia is said to be hard and fast.

Haw. - Kinoshita v. Canadian Pacific Airlines, 68 Hawaii 594, 724 P.2d 110 (1986) .

Idaho - Ray v. Nampa Sch. Dist. # 131, 120 Idaho 117, 814 P.2d 17 (1991).

Ill. - Duldulao v. St. Mary of Nazareth Hospital Center, 115 Ill.2d 482, 106 Ill.Dec. 8, 505 N.E.2d 314 (1987) ; Kaiser v. Dixon, 127 Ill.App.3d 251, 82 Ill.Dec. 275, 468 N.E.2d 822 (1984) .

Md. - Staggs v. Blue Cross of Maryland, Inc., 61 Md.App. 381, 486 A.2d 798 (1985) , cert. denied, 303 Md. 295, 493 A.2d 349 . In Fournier v. United States Fidelity & Guaranty Co., 82 Md.App. 31, 569 A.2d 1299 (1990) , cert. denied, 319 Md. 581, 573 A.2d 1337 , no protection was found in the personnel manual which stated, ''Dismissals for [causes other than dishonesty, etc.] are resorted to only after efforts to remedy the trouble have failed.'' This vague language, together with the fact that the employee's application stated that either party could terminate on two weeks notice, indicated that the employee had no reasonable grounds to understand that job security beyond the two weeks notice had been promised.

Mo. - Johnson v. McDonnell Douglas Corp., 745 S.W.2d 661 (Mo.1988) , en banc. The court in a strong dictum stated that there is no handbook exception to the at-will doctrine in Missouri. The actual holding appears to be that the handbook was informational and could not be construed as making definite promises. Moreover, the handbook stated that its rules were subject to change at any time.

N.J. - Woolley v. Hoffmann-La Roche, Inc., 99 N.J. 284, 491 A.2d 1257 (1985) , modified, 101 N.J. 10, 499 A.2d 515 .

N.Mex. - Sanchez v. The New Mexican, 106 N.M. 76, 738 P.2d 1321 (1987) .

N.Y. - Mycak v. Honeywell, Inc., 953 F.2d 798 (2d Cir.1992) ; Weiner v. McGraw-Hill, Inc., 57 N.Y.2d 458, 457 N.Y.S.2d 193, 443 N.E.2d 441, 33 A.L.R.4th 110 (1982) . In DeSimone v. Skidmore College, 159 A.D.2d 926, 553 N.Y.S.2d 240 (1990) , the manual was expressly incorporated into the written contract of employment. It was properly, however, held that there was no breach of any promise in the manual. Cf. Valvo v. Chautauqua Area Girl Scout Council, Inc., 159 A.D.2d 1021, 552 N.Y.S.2d 727 (1990) , manual ''does not contain a promise limiting defendant's unfettered right to discharge....'' The New York cases indicate that the handbook promise must be express. In addition, there seems to be a suggestion that the elements of promissory estoppel should be present. Sabetay v. Sterling Drug, Inc., 69 N.Y.2d 329, 514 N.Y.S.2d 209, 506 N.E.2d 919 (1987) .

N.C. - Trought v. Richardson, 78 N.C.App. 758, 338 S.E.2d 617 (1986) , disc. review denied, 316 N.C. 557, 344 S.E.2d 18 , explained in Salt v. Applied Analytical, Inc., 104 N.C.App. 652, 412 S.E.2d 97 (1991) , cert. denied, 331 N.C. 119, 415 S.E.2d 200 .

Pa. - Wagner v. Sperry Univac, Div. of Sperry Rand Corp., 458 F.Supp. 505 (E.D.Pa.1978) , aff'd, 624 F.2d 1092 (3d Cir.) .

S.C. - Small v. Springs Industries, Inc., 292 S.C. 481, 357 S.E.2d 452 (1987) , appeal after remand, 300 S.C. 481, 388 S.E.2d 808 , noted 43 S.Car.L.Rev. 387.

Tex. - Aiello v. United Air Lines, 818 F.2d 1196 (5th Cir.1987) , reh'g en banc denied, 826 F.2d 12 . Cf. Zimmerman v. H.E. Butt Grocery Co., 932 F.2d 469 (5th Cir.1991) , reh'g en banc denied, 937 F.2d 607 , cert. denied, 112 S.Ct. 591 .

Wash. - Thompson v. St. Regis Paper Co., 102 Wash.2d 219, 685 P.2d 1081 (1984) , en banc.

Wyo. - McDonald v. Mobil Coal Producing, Inc., 820 P.2d 986 (Wyo.1991) .

(n42)Footnote 42.

Ariz. - Thomas v. Garrett Corp., 744 F.Supp. 199 (D.Ariz.1989) , aff'd, 904 F.2d 41 (9th Cir.) , cert. denied, 111 S. Ct. 513, 498 U.S. 982, 112 L. Ed. 2d 525 .

Ill. - Daymon v. Hardin County General Hospital, 210 Ill. App. 3d 927, 155 Ill. Dec. 316, 569 N.E.2d 316 (1991) , appeal denied, 141 Ill.2d 538, 162 Ill.Dec. 485, 580 N.E.2d 111 ; Habighurst v. Edlong Corp., 209 Ill.App.3d 426, 154 Ill.Dec. 226, 568 N.E.2d 226 (1991) .

N.D. - Bykonen v. United Hospital, 479 N.W.2d 140 (N.D.1992) .

Ohio - Karnes v. Doctors Hospital, 51 Ohio St.3d 139, 555 N.E.2d 280 (1990) .

Utah - Johnson v. Morton Thiokol, Inc., 818 P.2d 997 (Utah 1991) .

Wash. - Smoot v. Boise Cascade Corp., 942 F.2d 1408 (9th Cir.1991) .

(n43)Footnote 43. Aiello v. United Air Lines, Inc., 818 F.2d 1196 (5th Cir.1987) , reh'g denied en banc, 826 F.2d 12 ; Perman v. ArcVentures, Inc., 196 Ill.App.3d 758, 143 Ill.Dec. 910, 554 N.E.2d 982 (1990) ; Cronk v. Intermountain Rural Electric Ass'n, 140 L.R.R.M. 2149 (Colo. App. 1992); McDonald v. Mobil Coal Producing, Inc., 820 P.2d 986 (Wyo.1991) . See Greene v. Howard University, 412 F.2d 1128 (1969) , discussed in § 2.13 above.

(n44)Footnote 44. An agreement for employment terminable at the will of either party is not an enforceable contract when made. But performance rendered by the employee under it, before any notice of revocation, creates a unilateral contract binding the employer to pay the specified wage and to perform all other promises that he may have made in the agreement. General Paint Corp. v. Kramer, 57 F.2d 698 (10th Cir.1932) , cert. denied, 287 U.S. 605 . But this is not a case of vagueness. The subsequent action is not mere interpretation of previous expressions. It is really the acceptance of an offer, the exercise of a power created by the expression of agreement made by the employer.

In Rubin v. Dairymen's League Co-op. Ass'n, 284 N.Y. 32, 29 N.E.2d 458 (1940) , reh'g denied, 284 N.Y. 816, 31 N.E.2d 927 , the defendant promised an exclusive agency as long as the plaintiff's service was satisfactory. The plaintiff made a return promise in terms so uncertain as to be illusory. Yet the rendition of satisfactory service by the plaintiff for a considerable period was held sufficient to make the defendant's promise binding.

(n45)Footnote 45. Cronk v. Intermountain Rural Electric Assn., 140 L.R.R.M. 2149 (Colo. App. 1992); Helmick v. Cincinnati Word Processing, Inc., 45 Ohio St.3d 131, 543 N.E.2d 1212 (1989) ; Kelly v. Georgia-Pacific Corp., 46 Ohio St.3d 134, 545 N.E.2d 1244 (1989) . But see Barker v. CTC Sales Corp., 199 Ga.App. 742, 406 S.E.2d 88 (1991) .

(n46)Footnote 46.

Ohio - Boggs v. Avon Products, Inc., 56 Ohio App.3d 67, 564 N.E.2d 1128 (1990) , covering up a production error.

Or. - Bewley v. Evanite Fiber Corp., 111 Or.App. 314, 826 P.2d 74 (1992) , review denied, 313 Or. 299, 832 P.2d 455 , neglect of duty and insubordination.

(n47)Footnote 47. See Helsby v. St. Paul Hospital and Cas. Co., 195 F.Supp. 385 (D.Minn.1961) , aff'd, 304 F.2d 758 (8th Cir.) , noted at § 4.2 n. 13.