105 Pa. Super 579 (1932).

One-Sentence Takeaway:  A party refraining from doing something that he/she has a right to do can provide sufficient consideration to form a contract.

Plaintiff was an employee of Defendant nearing retirement.  For his loyal service, Defendant promised to give Plaintiff $100 per month for as long as Plaintiff refrained from working for a competitor.  After four years, Defendant stopped payments and Plaintiff sued for breach of contract.

The issue before the court was whether the contract was supported by consideration.  The court answered in the affirmative.

The court reasoned:

“It is reasonable to conclude that it [was] to the advantage of the defendant if the plaintiff, who had been employed for a long period of time as its superintendent in the annealing department, and who, undoubtedly, had knowledge of the methods used by the employer, is not employed by a competitive company . . . There is nothing appearing of record, except the condition imposed by the defendant, that would have prevented this man of skill and experience from seeking employment elsewhere.  By receiving the monthly payments, he impliedly accepted the conditions imposed, and was thus restrained from doing that which he had a right to do.  This was a sufficient consideration to support a contract.”

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