Wednesday, July 05, 2006

Pledge Battle

The Ocala Star-Banner reports on a lawsuit over an unpaid pledge to the Appleton Museum of Art in Florida. The case, seeking to enforce a $1 million pledge against the estate of Edith-Marie Appleton, one of the founders of the museum, goes to trial in Illinois state court this week. Suits to enforce gifts are relatively rare -- museums often worry about frightening away other potential donors, ruining their relationships with family members and friends of the defendant, and the publicity that such a suit inevitably attracts. There are also legal hurdles to enforcement, chief among them the issue of "consideration" for the promise. The statute of frauds can also come into play (it's unclear from the story whether the Appleton pledge was in writing or not). Still, there have been a handful of cases seeking enforcement, with mostly successful results. Generally, if the museum can show that it relied on the promise -- for example by beginning construction, or borrowing additional moneys on the expectation of the gift -- the courts will find consideration and, therefore, a binding contract. I assume that will be the argument here; the article refers to an earlier federal lawsuit (since withdrawn) in which the university alleged that it "took on heavy financial liabilities in the museum based on the premise it would receive the full amount of the alleged pledge and lost state-matched funding in the process."