“The Puffy Shirt” – Oral Contracts

After being unable to hear Kramer’s low talking girlfriend Leslie, Jerry inadvertently agrees to wear a “puffy shirt” on The Today Show that was designed by her. Does Jerry’s verbal and physical affirmations create a binding oral contract to wear the shirt?

New York courts will enforce an oral contract as long as the basic elements of a contract have been fulfilled. They are:

1. Offer
2. Acceptance
3. Consideration
4. Mutual assent
5. An intent to be bound.

Additionally, both sides must agree on all the essential terms. These are the elements of any contract, regardless of whether they have been written down or conducted orally. Therefore, if Leslie could prove that she and Jerry fulfilled these requirements, a court will consider their agreement an enforceable oral contract. Despite his protestations, Jerry could be forced to be the first pirate.  

The first thing Jerry is going to do in puffing up his defense is to look at the New York Statute of Frauds to see if an agreement to wear a puffy shirt is the kind of contract that would be prohibited from being created orally. Jerry, though, would be out of luck. The Statute of Frauds only prohibits oral contracts that can not be performed within one year, are made in consideration of marriage, or are promises regarding debt amongst other very specific categories. Bad news for Jerry. Now, as long as Leslie can prove the contract elements listed above, she’ll be getting an “ayyyyy captain” from the court .

But like any swashbuckling swinging-from-the-chandelier pirate, Jerry should not fear for long because there is likely not enough evidence for Leslie to show that she and Jerry made an oral contract. Although Leslie certainly made an offer, Jerry will deny ever accepting it because he did not hear her. He did nod and say both “sure” and “yep,” indicating to Leslie that he was agreeing to wear the shirt, but Jerry will testify in court that he never heard her and was merely being polite.

Additionally, Elaine, the only other person at the table, would certainly testify on Jerry’s behalf. Even if Leslie were to take the witness stand, a court would quickly realize that she is a low talker and understand why Jerry was unable to hear her.

Though it is unlikely, we can analyze what will happen if a court finds Jerry’s defense to be mere puffery and that he really did hear Leslie at the restaurant.

A court likely still would not find Jerry to have made an oral contract because there was no “consideration” given to him. “Consideration” is something of value offered to a party when entering into a contract; it is the reason they are allowing themselves to be bound by the contract. Without consideration, a party can not be bound by a contract. Contract law understands that buccaneers on the high seas often make agreements with a devil-may-care attitude, and therefore the law requires “consideration” before mandating that an agreement becomes a binding contract.

Had Leslie offered Jerry some buried treasure in exchange for wearing the shirt, then that would constitute consideration. She did not. So even if Jerry had agreed to wear the puffy shirt, there was no consideration offered to him and therefore there is no oral contract enforceable by a court.

Editor’s note: We will return to the issue of consideration and oral contracts in the “The Seven,” regarding the potential oral contract between Kramer and Elaine over a bicycle.

However, someone ought to warn Jerry that there’s a Spanish galleon coming 20 degrees off the starboard side in the form of the equitable remedy of Promissory Estoppel. This principle allows a contract to be enforced even without consideration if the promisee acted in reliance on the promisor’s agreement to their ultimate detriment. Here, we may have just that, as Leslie, the clothing stores, and the factories in New Jersey all decided to stock and manufacture more puffy shirts in reliance on Jerry’s agreement to be a pirate.

That would be a lot of doubloons wasted based on Jerry’s promise to wear the shirt! 

In order for there to be promissory estoppel, particularly in New York, three factors must be fulfilled:

1. A clear and unambiguous promise
2. A reasonable reliance on that promise
3. It would be an unconscionable and unjust injury to not enforce the promise.

The second two factors are certainly fulfilled, as it would be reasonable to expect Leslie to start ordering more shirts with all the publicity from Jerry wearing the shirt on national television, and it would ruin Leslie’s career if Jerry were to not were the shirt. But the first prong is still up for debate. It would come down to a fact-finding question for a court to decide as to whether Jerry really promised to wear the shirt. But as we saw above, there’s a pretty slim chance that a court would find Jerry to have made such a promise.

Thus, Jerry likely will be telling Kramer avast ya matey. He does not have to be a pirate.