Contracts 101 and “Ethicist” Chuck Klosterman

The New York Times’s Ethicist column is infamously awful, but I had generally found that the new columns by Chuck Klosterman were not as bad as they’d been before. Nonetheless, today’s paper featured a howler.

Here’s the question:

I’m on the art-museum board, so that is my preferred artistic donee. An acquaintance repeatedly called me for a donation to the opera. I don’t like opera. I said he should donate to the art museum. He said he’d give to the museum whatever I gave to the opera. We agreed on $10,000 apiece. He called the next four years and offered to make the same deal. I accepted each year. As I was looking through our donor list for unrelated reasons, I discovered he has been giving only $1,000 a year. I sent him an e-mail telling him of my discovery, and he responded, “Nailed me.” As if it were funny. What is my ethical response? Demand my excess back from the opera? Threaten to sue him if he doesn’t pony up to the museum? Gossip?

Klosterman responds, in part:

As for pursuing legal action: I don’t even know how that would work. There was no contract signed. It’s not illegal to persuade someone to donate money to an opera house (it would be different if your acquaintance were operating on behalf of the opera’s board, or if the opera facility didn’t actually exist — but that’s not how you described the transaction).

Klosterman’s answer demonstrates a frequent misconception about contract law, namely that most contracts need to be “signed” to be legally enforceable. That is not the case. For the most part, oral agreements are just as binding as written ones. To be sure, there is a small set of contracts that are generally governed by the “statute of frauds” and must be in writing — like long-term leases, contracts that inherently take more than a year to perform, and contracts for the sale of at least $500 in goods. But there’s no reason from the letter to think those exceptions apply. (A donation is not “goods”; they made a new agreement every year.)

Rather, the usual problem with oral contracts is that it’s hard to prove the existence or content of the contract in court, but even that is taken care of by the subsequent email exchange in which the other guy confesses.

(It’s also the case that an enforceable contract has to have “consideration,” rather than just being a one-sided promise of a gift. But this contract has two sides because each side is agreeing to give to the other’s preferred charity.)

I may well be missing something (or there may be unusual facts that aren’t disclosed in the column), but I can’t think of a reason why the contract wouldn’t be enforceable. Indeed, it’s almost as if it was written by a contracts professor as a textbook example of an enforceable contract.