In January 1977, MJD applied for a loan. It was approved subject to guaranty by the SBA. Guaranty was given in April 1977.
On Jan application, list of possible gurantors was Melton Meadors, Judd and wife, Ducote and wife.
In April 1977, Melton Meadors and Betty Meadors, the appellant, were married.
Betty signed the SBA forms even though there was no space for her signature.
MJD defaulted on the loan, and the SBA went after Betty Meador's assets.
Procedural History:
U.S. won in district court.
Meadors appeals and wins.
Issues:
Is there consideration when a party that wasn't involved in the initial negotiation of a contract signs the final version of the contract when their signature is not required?
Is a person bound to a contract when they sign it even though neither side required them to sign?
Holding/Rule:
There is no consideration when there is no bargain.
Consideration is not given to a person who signs a contract when their signature is not required to make the bargain.
Reasoning:
The gov't suffered no detriment from her signing the contract, and Meadors gained no benefit from signing it.
Whatever passed to her and her husband because of the loan would have passed without her signature, so no bargain was involved.
