A scenario similar to this has undoubtably been considered before but I haven't come across anything that is in the same vein. In any case, would this example be a specific type of contract/agreement and would it be legally enforceable.

Agreement: Person A is determined to stop smoking in six months time. Person A and Person B make an agreement whereby Person A shall deposit into an escrow account $10,000; if at the end of six months Person A has successfully stopped smoking then the agreement stipulates all the money is returned to him. If he fails in his goal and is still smoking after six months, then Person A has instructed that Person B shall be entitled to claim the $10,000 and spend however he wishes; it is intended to serve as an incentive and to discourage failure in achieving the goal.

What would a court say to Person A if - after 3 months he decided he was no longer interested to stop smoking and wanted his money back?

  • This is known as a "commitment contract", and is a real thing that people do.
    – Sneftel
    Dec 1 '20 at 14:26
  • 1
    In what location?
    – Studoku
    Dec 1 '20 at 14:27
  • Also see stickk.com/faq/legal/Legal
    – Sneftel
    Dec 1 '20 at 14:28
  • Some states make betting illegal in any shape or form!
    – Trish
    Dec 2 '20 at 11:10

What would a court say to Person A if - after 3 months he decided he was no longer interested to stop smoking and wanted his money back?

For simplicity, let's take the contract between the escrow service and A/B out of the equation.

There is no contract between A and B because there is no consideration moving from B. B parts with nothing for their chance to get $10,000.

So, if A takes the case to the court after 3 months they will get their money back (again, not considering troubles with escrow). B will have no legal entitlement whatsoever.

  • okay. what if B is tasked to hold the funds safely meanwhile. B also commits to devote time to reviewing reports from A and provide messages of encouragement or concern back to A. And lets assume that A and B both agree that $10,000 is an acceptable representation of the value (to A) of B's role in the agreement. It's my understanding that courts generally will NOT attempt to second guess the "appropriateness" of financial sums in private agreements. Is that true? In short, I'm revising the deal so that instead of doing NOTHING B is doing something.
    – chrisinps
    Dec 1 '20 at 15:11
  • 1
    @chrisinps you should be aware that consideration is only required for a contract in common law jurisdictions. In civil law jurisdictions, there is no concept of consideration, so if the contract is governed by (for example) French law, this analysis would not apply.
    – phoog
    Dec 1 '20 at 18:27
  • @chrisinps Yes that would be a contract then. The sum does not matter indeed provided that it is non-zero.
    – Greendrake
    Dec 2 '20 at 4:03

Can someone back out from a bet like this?

The issue of whether a contract exists at all depends on the jurisdiction (see phoog's comment). The example @Sneftel provided is inapplicable because that one actually entails a consideration provided by the counterparty: "tools to assist you in achieving your goal".

Only in some scenarios the matter could be enforceable under a theory of promissory estoppel, the elements of which are listed in US Ecology, Inc. v. State, 28 Cal.Rptr.3d 894, 904 (2005). Element 4 (injury resulting from B's reliance on A's commitment) seems most difficult for B to prove because your description nowhere reflects B that has a cognizable interest.

  • 1
    Consideration is not an element of contract formation in most of the world, so the statement about the existence of a contract should probably be qualified.
    – phoog
    Dec 1 '20 at 18:29
  • @phoog Thanks for the heads-up. I should revisit the answer once I get a better understanding of the remedies for breach in the OP's scenario. With respect to French law, most of the examples/rulings I have found so far relate to surety contracts, loans, and donations, but nothing on what would constitute [Person B's] "deprived gain" under article 1231-2 of the Code civil. I'm inclined to think that such "contrat unilatéral" would be treated akin to promissory estoppel because, if A quitted smoking, B would have gained nothing anyway. Dec 2 '20 at 0:00

This would probably get down to the specific terms agreed with the escrow account, but from a layman perspective of the terms, person A loses the money.

Changing your mind is not a different category. In fact, as soon as A lighted the first cigarette (and/or was caught, maybe), surely he would change his mind and want to get out of the bet.

The proper procedure if person A decides after 3 months that he was no is no longer interested to stop smoking and also wants his money back would be to stay out of tobacco for another 3 months, and resume smoking 6 months and 1 day after making the bet. (Although I guess he might change his mind several times more in the meantime)

Also interesting, this could be presented as an agreement whereby person A gives the money to person B after 6 months, or as a gift of the money to person B that will have to pay that back to A as a reward after 6 months, with probably different consequences.

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