Wednesday, October 19, 2011

Featured Case: Wood v. Lucy, Lady Duff Gordon

In this contract law classic, Justice Benjamin Cardozo of the NY Court of Appeals establishes the doctrine of an implied obligation of good faith. Here is the hornbook brief summary of the case: Lady Duff Gordon is a fashion designer.  Otis Wood is a NY advertising man.  They enter into a written contract whereby Gordon grants Wood exclusive rights to market and sell her goods and Wood agrees to account to Gordon for 1/2 of the proceeds. Eventually, Gordon begins to endorse products marketed by others and Wood files suit for breach of contract. Gordon claims that Wood's promise is illusory -as he has not bound himself to actually try to sell her fashions, but merely to account for profits, if any. Cardozo determines that serious business peole would not have taken the time to negotiate such an agreement if they had not intended some perfomance. He finds expressions of implied intent to perfom on Wood's behalf:  His promise to pay the defendant one-half of the profits and revenues resulting from the exclusive agency and to render accounts monthly, was a promise to use reasonable efforts to bring profits and revenues into existence.

So, the case is interesting and illustrative for class.  But, this is just the beginning.  If you like to personalize cases - to help students understand that these cases involve real people making real decisions, the resources available to you are plentiful. Start with an article by Columbia Law Professor Victor Goldberg. Goldberg looks at the historical evidence to conclude that, ironically, the shrewd Wood had probably carefully crafted the Gordon contract so as to refrain from binding himself to performance - precisely the course of conduct that Cardozo concluded was unlikely. However, for me, his historical information on the principal players in the litigation is even more valuable than his insightful legal analysis.

Through his paper we learn that Otis Wood was one of somewhere between 14-17 children of colorful NY Mayor Fernando Wood.  Father Fernando was famous for, among other things, having supported the Confederate cause during the Civil War. A loyal Tammany Hall Democrat, Fernando later served in Congress from NY.  Other exploits of the colorful Wood family are documented online. Read here about Otis's involvement in the estate of his aunt Ida Mayfield Wood.

For her part, Lucy Lady Duff Gordon had already lived through at least one major disaster prior to the Wood business debacle. Lucy and her husband, Sir Cosmo Duff Gordon, survived the sinking of the Titanic, but not without controversy. Her story is dramatized in the video below. There is a wealth of images of Lady Duff Gordon available on the web - here at the Encyclopedia Titanica, and here. I was unable to find any images of Otis F. Wood. But here you will find an image of a drawing book most certainly produced by Wood's lithography company in NY.

In 2008, the Pace Law Review published results of a symposium on this interesting case.  Other useful articles may be found here and here  and here.

Image of Lucy, Lady Duff Gordon from:

Lady Duff Gordon, the leading fashion designer of the Edwardian age.

Image from:

Imageof Lady Duff Gordon (third from left) and Sir Cosmo (standing directly behind her)  from:

This is a  photograph of Titanic survivors Laura Francatelli, standing second right, and her employers Lady Lucy Duff-Gordon, standing 3rd left, and Sir Cosmo Duff-Gordon, standing directly behind LadyLucy, standing on the rescue ship Carpathia, made available by auctioneers Henry Aldridge and Son on Thursday Oct. 7, 2010. Francatelli heard a terrible rumbling noise, then anguished cries for help as her rowboat pulled away from the sinking ocean linerTitanic that dreadful night in 1912. Photo: AP


  1. Mark, the paper you attribute to Katherine Franke was written by her Columbia Law colleague Victor Goldberg. Here's a link to the SSRN version of that paper:

  2. Rip, thanks for the help. I have made the correction in the article.