The 1974 Jordan Case is an important state court case on the enforceability of pledges. It arose because an individual made a pledge to a hospital, paid part of the pledge, then died. The hospital sought to recover the unpaid balance of the pledge from the individual’s estate.
The pertinent part of the pledge document was this:
In consideration of and to induce the subscriptions of others, I (We) promise to pay to Mount Sinai Hospital of Greater Miami, Inc. or order the sum of Fifty Thousand and no/100 dollars….
The language on which the Florida Supreme Court focused was:
In consideration of and to induce the subscriptions of others….
The court held that this statement, all by itself, did not constitute consideration for the pledge. Some courts in other states have held that such language does constitute consideration for a promise to make a charitable gift. But not the Florida Supreme Court in 1974.
So, according to the Florida Supremes, the only way the hospital could recover the unpaid balance of the pledge from the donor’s estate was to show two things:  that the pledge was made for a particular purpose, as opposed to general purposes; and  that the hospital actually relied on the pledge.
The pledge was not made for a particular purpose, and there was no evidence the hospital actually relied on the pledge. So, the hospital lost.
Takeaway: Pledges need to be drafted carefully with an eye toward the state law governing the pledge.
Reality: Many pledge agreements are cranked out using templates that need to be discarded.
By Jon Tidd