Business Law: Principles for Today's Commercial Environment 3rd Edition by Marianne Moody Jennings, David Twomey, Marianne Jennings

Exercise 3

When a movement was organized to build Charles City College, Hauser and others signed pledges to contribute to the college. At the time of signing, Hauser inquired what would happen if he should die or be unable to pay. The representative of the college stated that the pledge would then not be binding and that it was merely a statement of intent. The college failed financially, and Pappas was appointed receiver to collect and liquidate the assets of the college corporation. He sued Hauser for the amount due on his pledge. Hauser raised the defense that the pledge was not a binding contract. Decide. What ethical values are involved [Pappas v Hauser, 197 NW2d 607 (Iowa)]