Dyer V. National By-Products Inc Case Study

Case Name: Dyer v. National By-Products, Inc., Supreme Court of Iowa, 1986., 380 N.W.2d 732

Judicial History: The District court of Iowa granted a motion for summary judgement in favor of National By-Products, Inc. The court determined that Dale Dyer had an invalid claim to bring forth a lawsuit, thus lacking consideration to create a contract.

Facts: In 1981, Dale Dyer lost his foot in a work-related accident while employed at National By-Products Inc. National By-Products Inc. placed Dale Dyer on a paid leave of absence until he returned to work in August 1982 and was laid off indefinitely in March 1983. Dale Dyer sued his former employer for breach of oral contract alleging they offered lifetime employment in exchange for not bringing

a claim against them regarding his work-related injury. National By-Products Inc., filed a motion for summary judgement claiming the agreement did not exist and the motion was granted. Dale Dyer appealed with the Iowa supreme court on the basis he had a valid claim to file suit for his work-related injury and that was sufficient consideration to uphold a contract with National By-Products, Inc.

Issue: Whether agreeing not to file a lawsuit is sufficient consideration if the claim in the lawsuit is invalid.

Holding: Dale Dyer has sufficient consideration.

Reasoning: The court held that a promise not to file a claim is valid consideration if the party making the promise believed in good faith that the claim was valid.

Decision: The summary judgement to National By-Products was reversed and remanded to determine that Dale Dyers claim was in good faith.