This section is from the book "The Law Of Contracts", by William Herbert Page. Also available from Amazon: Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises.
Analogous to the cases in which performance must be made to the satisfaction of one party,1 are the contracts, such as contracts of employment in which the amount of wages is left to the decision of the employer. In such cases the employer, if acting in good faith, is the sole judge,2 and his decision is conclusive in the absence of fraud or bad faith, even if he fixes the compensation below what the court would hold to be a reasonable amount.3 Under a contract to render services as attorney for such a fee as the client "is able to pay and thinks reasonable," the client's decision is conclusive.4 A provision for paying the physician of a railroad company, "subject to the approval" of certain officers of the railroad, makes their approval a condition precedent to recovery.5 A contract to increase the salary of an employe if at any time the amount of increased business or the character of the employe's work fairly justifies a change of mind on the part of the employer as to the amount to be paid, makes the employer the sole judge as to such facts.6
Under a contract which leaves the amount of compensation to the employe, it is said that he can not make an unreasonable charge;7 but this result is reached by construing the promise as one to "pay any sum charged, if it was reasonable."1