Story Case

The Gilbert Coal Company employed John Clark, an attorney, to collect an account of $1,000 owing to them from a former customer. The employment was understood to be on the usual ten per cent basis, providing Clark collected the money. That is, he should receive ten per cent of the collection. Clark wrote several letters to the debtor, but before the money was collected, the debtor moved to another town. Clark did nothing about the matter for more than a year, and, without consulting him again, the coal company requested another lawyer, living in the town to which the debtor had moved, to collect the account. This lawyer collected the account and remitted to the company. Now Clark demands his share of the commission. The company refused to pay on the ground that Clark had abandoned the contract. Is this a good defense?

Ruling Court Case. Warren Vs. Rendrock Powder Company, Volume 9 New York Supplement, Page 842

In 1882 Warren entered into an agreement with the powder company by the terms of which the plaintiff, Warren, was to assist the company in getting the United States to use a blasting powder manufactured by the defendant for a certain purpose. It was agreed that if the plaintiff succeeded in getting the United States to make the purchase, the plaintiff was to have a ten per cent commission on the sale.

Warren entered upon the work contemplated. He conducted experiments for the benefit of the government employees who had charge of making the purchase. After having tested the powder, the government decided that it was not suited to its purpose. The plaintiff, during these months, had put in about half of his time in negotiating with the government. When the government rejected the bid of the powder company, the plaintiff made no further attempt to interest the government.

Two years later, the defendant, having improved the powder, again approached the government officers with a view to selling powder for use in blasting, originally contemplated, which had not yet been done. After testing it again, under experiments conducted by another agent of the defendant, the government purchased from the defendant.

The plaintiff then set up a claim for compensation. The defendant contended that he was entitled to no compensation because he had abandoned his contract before it was completed.

Justice Brady delivered the opinion.

Plaintiff's right to compensation depended entirely upon the government making this purchase through his efforts. In view of the fact that he ceased to take any interest in the project, and abandoned the work after the government first rejected his offer, he is not entitled to compensation, notwithstanding that a sale was made to the government.

Ruling Law. Story Case Answer

When an agent voluntarily abandons a contract by which he has agreed to serve another during a certain period, he is entitled to no compensation for what he has done.

In the Story Case, Clark is not entitled to any commission on the sum collected. He is considered as having abandoned the contract. Consequently, he is entitled to no compensation.