This matter is before the Court for trial on stipulated facts.
The issue is whether the Statute of Frauds may serve as a defense to a claim to enforce a charitable pledge. There are no New Jersey cases which have addressed this precise issue.
The defendant has made a charitable pledge to the plaintiff in the sum of $2,000, which the defendant now refuses to pay. Plaintiff has brought suit for $4,000, which the defendant agrees to pay if there is a judgment in favor of the plaintiff. Defendant defends on the basis that the pledge is unenforceable because of the one year provision of the Statute of Frauds.*fn1
The great bulk of the jurisdictions, including New Jersey, hold that a charitable pledge constitutes an enforceable contract. See generally Restatement (Second) of Contracts, Sec. 90 (1981); Annotation, "Consideration for subscription agreements." 115 A.L.R. 589 (1938). There are various theories as to why this is so:
Some courts have found consideration on the theory that the donee impliedly promises to use the promised gifts for charitable purposes. . . . Other cases have found consideration in the purported exchange of promises between the subscribers. . . . Other cases have held that the subscription is an offer to a unilateral contract which is accepted by the charity's performance of the terms of the subscription. . . . Of late, some courts have tended to abandon the attempt to utilize traditional contract doctrines to sustain subscriptions and have placed their decision on grounds of promissory estoppel. [J. Calamari and J. Perillo, The Law of Contracts, 207-208 (1977).]
One would be hard-pressed, however, to find either consideration for the subscriber's promise or a reliance on that promise by a charity. With regard to whether there is consideration, Williston states:
The very term "charitable subscription" indicates that the subscriber's promise is made as a gift and not in return for consideration. There is no bargain between the parties. Even if one were attempted it is open to doubt whether
the acceptance or promise to accept a pure benefit -- as a sum of money -- can legally be sufficient consideration for a promise to confer the benefit; but this point need not be troublesome because no bargain of the sort is contemplated. [S. Williston, A Treatise on the Law of Contracts, Sec. 116 (3 Ed.1957).]
In the Restatement, the authors state:
American courts have traditionally favored charitable subscriptions . . . and have found consideration in many cases where the element of exchange was doubtful or non-existent. [ Restatement (Second) of Contracts, Section 90, Comment f (1981).]
Reliance is also a questionable basis for enforcing a charitable subscription. That is because in reality, a charity does not rely on a particular subscription when planning its undertakings. (Clearly, Jewish Federation of Central New Jersey did not undertake ...