278 F.2d 79 (3d Cir. 1960)
Lind v. Schenley Industries is a staple of contracts and agency casebooks because it sits squarely at the intersection of oral employment agreements, the Statute of Frauds, and corporate/agency authority.
Whether an oral promise by a corporate sales executive to pay an employee a 1% override on gross sales in his supervised territory is enforceable—specifically: (1) whether there was sufficient evidence that a binding contract existed; (2) whether the executive had actual or apparent authority to bind the corporation; and (3) whether the agreement is barred by the Statute of Frauds as one not performable within one year.
1) A corporate principal is bound by the acts of its agent when the agent acts within his actual authority or apparent authority, the latter arising from manifestations by the principal that would lead a reasonable person to believe the agent is authorized to act as he did. The scope of apparent authority and whether the principal's conduct created it are questions of fact for the jury when supported by evidence. 2) Under prevailing contract law (as applied by the Third Circuit under state law), an oral agreement is not within the one-year clause of the Statute of Frauds if it is capable of being fully performed within one year—for example, where the arrangement is of indefinite duration or terminable at will. 3) Contract terms are sufficiently definite if they can be ascertained by objective standards, including usage of trade, course of dealing, and the parties' performance, so that a factfinder can compute damages with reasonable certainty.
The Third Circuit reversed the judgment notwithstanding the verdict and reinstated the jury's verdict for Lind. The court held there was sufficient evidence for a jury to find: (a) an enforceable oral contract promising a 1% override on gross sales in Lind's territory in return for expanded supervisory duties; (b) that the high-ranking sales executive possessed apparent authority to make the compensation promise on behalf of the company; and (c) that the oral agreement was not barred by the Statute of Frauds because it was capable of performance within one year and was sufficiently definite to permit calculation of damages.
Lind is a go-to case on three doctrinal fronts: (1) apparent authority in the corporate context—how a principal's placement of an executive can clothe that person with power to bind the company on compensation arrangements; (2) the Statute of Frauds—why oral compensation agreements of indefinite duration are typically enforceable when they are capable of performance within a year; and (3) the respective roles of judge and jury—fact questions about promise, authority, and usage of trade belong to the jury when supported by evidence. It also illustrates how usage of trade and course of performance can give content to seemingly general terms (like "override") and how damages for an oral commission agreement can be computed with reasonable certainty using business records.