Contract Law Case Study

Contract Law Case Study PART I LINUS WISHES TO SUE CHARLIE On what contractual grounds could he sue? Linus could sue Charlie on the grounds of the mailbox rule/postal rule, since a contract was created on June 15, 2009 when Linus wrote back to Charlie accepting the offer, not when it was received. Once the mode of communication is the mail, an acceptance becomes valid when it is dispatched or placed in the control of the US Postal service, not when it is received by the offeror. Will Linus prevail? Yes, Linus will prevail even though the agreement was not communicated to the offeror, it does not prevent the contract from being created. What if any defenses, contractual arguments or counterclaims would Charlie have? Charlies defense for a counterclaim should include the fact that while Linus accepted the offer in a timely fashion, the acceptance did not correspond with the offer, when Linus requested to change the original offer that changed the terms of the agreement and an offer in one set of terms can hardly be accepted by a communication in different terms. Will Charlie prevail? Yes, and to reiterate that an acceptance of a contract means that nothing should be added to the offer, even if it is consistent or similar to the offer. The offeree must accept unequivocally without changing the original offer. CHARLIE WISHES TO SUE THE VET On what contractual grounds could he sue? Charlie could sue on the grounds that while there was an exculpatory clause on the receipt releasing Vet Emporium from liability in connection with the treatment of Snoopy and Woodstock, that did not waive the veterinarians standard of care owed to the patients. This unconscionable clause is voidable for reasons of public policy, because a party may not exempt themselves from liability from a duty imposed on them by a statute for their negligence in the performance of a duty imposed upon them by law. Charlie could recover for intentional infliction of emotional distress for harm to Woodstock. Will he prevail? Yes, the veterinarians conduct was unprofessional, when he endangered the health and welfare of Woodstock due to unreasonable safety. What if any defenses, contractual arguments or counterclaims would the Vet have? The veterinarian may assert that the exculpatory agreement which was part of the receipt waived Charlies right to sue for injuries on the grounds that the extended boarding services provided was not a primary function of the veterinarians practice and when Charlie used these services, he did so voluntarily. Will he prevail? Probably not, while waivers are customarily part of a boarding agreement, they are unenforceable in many jurisdictions. SALLY WISHES TO SUE THE VET On what contractual grounds could she sue? She could sue on the grounds of breach of a unilateral contract. Once an offer has been made such as when Vet Emporium posted the advertisement all over the area of a reward for the return of Woodstock, acceptance of that contract was satisfied when Woodstock was found by Sally. Once Sally performed the condition, the offeror was contractually obliged to pay her. Will she prevail? Possibly, there might be an issue with the way in which she returned Woodstock. She probably should have taken him to Vet Emporium to collect the reward. What if any defenses or contractual arguments would the Vet have? Vet Emporium could argue that Sally was not obligated to the reward since she did not return Woodstock to their office. Will they prevail? Yes, this was condition precedent contract that stipulated that Woodstock had to be returned to Vet Emporium in order to collect the $50.00 reward. THE VET WISHES TO SUE CHARLIE On what contractual grounds could he sue? He could sue for failure of payment for services rendered to Snoopy. Will he prevail? Yes, payment is still due for caring of Snoopy. What if any defenses or contractual arguments would Charlie have? In defense, Charlie could state that because of the veterinarians negligence Snoopy suffered emotional loneliness when Woodstock flew away, he should be awarded damages. Will he prevail? Yes. Compensatory damages can be awarded for the breach of contract. SALLY WISHES TO SUE CHARLIE On what contractual grounds could she sue? Sally could sue Charlie for refusing to pay as agreed, for caring for Woodstock. Will she prevail? Yes, Charlie expressed orally that he would reimburse Sally $100.00 for finding and caring of Woodstock. What if any defenses or contractual arguments would Charlie have? None, Sally expected payment for service and Charlie should have known that payment was expected. Will he prevail? No, Charlie could have picked up Woodstock without offering to reimburse Sally. He committed himself to the payment. LUCY WISHES TO SUE LINUS On what contractual grounds could she sue? Lucy can sue Linus for compensatory damages for the loss of bargain of the work that he was to perform. Will she prevail? Yes, she can sue Linus for breach to recover the additional $325.00 in compensatory damages and for other fees incurred to obtain performance from another source. What if any defenses or contractual arguments would Linus have? Linus could argue that the breach was unintentional and was based upon the reliance of a contract with another party. Will he prevail? No. Regardless of the circumstances, he still breached his contract with Lucy. PART II SCHROEDER V LUCY On what contractual grounds could he sue? Schroeder could sue on the grounds that he was not advised to obtain his own independent counsel to have the document reviewed before signing the prenuptial agreement. He could sue that the agreement was unconscionable when it was executed and, he was not provided a fair and reasonable disclosure of the property or financial obligations of the other party and he did not have, or reasonably could not have had, an adequate knowledge of the property or financial obligations of the other party. Will he prevail? The resulted outcome can go either way, prenuptial agreements are routinely upheld and enforced by courts in virtually all states, even if only one party had an attorney (In re Marriage of Bonds 2000); however, there are circumstances in which courts have refused to enforce certain portions and provisions of such agreements(Estate of Lutz 1997). What if any defenses, contractual arguments or counterclaims would Lucy have? Lucys defense would be that while her actions were not laudatory they did not negate the voluntary nature of the execution. A unilateral promise such as to buy Schroeder a new piano if he will marry must be in writing. Such statements were not included in her prenuptial agreement. Lucy could also argue that it is Schroeders responsibility to delay the signing of an agreement that may not be understood. Will Lucy prevail? Yes, she acted appropriately and retained counsel on her behalf. LUCY V LAWYER On what contractual grounds could she sue? She could sue the attorney for negligent misconduct, malpractice and misrepresentation by concealment of not informing her of his status to practice law. The attorney violated state statues which prohibits the unauthorized practice of law and suspension for failure to pay bar fees. Will she prevail? Yes, many states have statues that suspend attorneys from practicing law for failure to pay their bar fees. Failure to pay the annual license fee will automatically suspend the delinquent lawyer from the practicing law in that state. What if any defenses, contractual arguments or counterclaims would the Lawyer have? None, he violated a state statue, and committed a fraud by practicing law knowing that his license may be suspended for not paying his bar dues. He shouldnt have any defenses available because he engaged in fraudulent misrepresentation that was detrimental to public policy. Will he prevail in his defenses or his counterclaims? No. Technically, all the work that he might have done while not in the possession of a valid license might be voided. PIGPEN V MARCIE On what contractual grounds could he sue? Pigpen could sue Marcie for fraudulent misrepresentation the facts for failing to disclose that they is an insect infestation, when she informed Pigpen that there was no insect problem in her home. Pigpen could also sue for recovery of his earnest money that he gave to Marcie. Will he prevail? Yes. Marcie failed to comply with the full performance of the contract. What if any defenses, contractual arguments or counterclaims could Marcie have? Marcie can argue substantial complete performance by getting rid of the insect infestation. Will she prevail in his defenses or her counterclaims? No. The problem with insect infestation cannot be easily corrected and intentionally failing to comply with the terms is a breach of contract. She intentionally withheld pertinent information from Pigpen about the condition of her home in regards to insects. LUCY V MARCIE On what contractual grounds could she sue? Pigpen could sue Marcie for fraudulent misrepresentation the facts for failing to disclose that they is an insect infestation, when she informed Pigpen that there was no insect problem in her home. Pigpen could also sue for recovery of his earnest money that he gave to Marcie. Will he prevail? Yes. Marcie failed to comply with the full performance of the contract. What if any defenses, contractual arguments or counterclaims could Marcie have? Marcie can argue substantial complete performance by getting rid of the insect infestation. Will she prevail in his defenses or her counterclaims? No. The problem with insect infestation cannot be easily corrected and intentionally failing to comply with the terms is a breach of contract. She intentionally withheld pertinent information from Pigpen about the condition of her home in regards to insects. LUCY V MARCIE On what contractual grounds could she sue? None, Marcie placed a condition upon which the sale would go forward if the sale of her existing home met the conditions outlined. Will she prevail? No. Since Marcie was unable to secure a buyer for her home, the offer to buy Lucys home is voided on the grounds that the condition preceded her absolute duty to buy. What if any defenses, contractual arguments or counterclaims could Marcie have? Marcie could use the defense that she placed the condition precedent in her contract that she would buy Lucys home upon the sale of her own home for $300,000 or more within 30 days. Will she prevail in her defenses or her counterclaims? Yes, if no one pays the price she has established within the period indicated, the agreement to buy Lucys home will fail because the condition precedent was not met. MOMS V SCHROEDER On what contractual grounds could they sue Schroeder? The moms can sue on the grounds of personal performance because they did not consent to the change. The moms can claim that delegation was not effective because the students complained about Peppermint Pattys ability and that materially altered their expectations. On what contractual grounds could they sue Peppermint Patty? They could sue Peppermint Patty for breach of her duty. Special trust was placed on her performance based on the personal skills of Schroeder. Will they prevail? Yes. Contractual duties cannot be delegated. The performance by Peppermint Patty varied materially from what was expected. Also, a delegation of duties does not relieve Schroeder of his obligations under the contract. What if any defenses or contractual arguments would Schroeder have? None, once Peppermint Patty failed to perform then Schroeder is liable to the moms. Will he prevail? No, the assumption of duty by Peppermint Patty varied materially from what was expected. Could he sue Peppermint Patty? Schroeder can sue Peppermint Patty for breach of contract and performance of duty. PEPPERMINT PATTY V SCHROEDER On what contractual grounds could she sue Schroeder? Peppermint Patty could sue Schroeder for payment of services rendered. Regardless of the fact, that the duties were not performed to the satisfaction of the moms, she still completed her obligation. Will she prevail? Possibly, personal satisfaction of the party must be fulfilled in order for a court to rule, unless the expression of dissatisfaction is to avoid payment. What if any defenses or contractual arguments would Schroeder have? Schroeder could argue that Peppermint Patty did not perform to the satisfaction of the moms and therefore performance was not satisfied and the condition was not fulfilled. Will he prevail? Yes, the breach was material since the performance was not at least substantial. Could he sue Peppermint Patty? Yes, he could sue Peppermint Patty for breach of contract of nonperformance of a contractual duty. PART III Once the offer was accepted by Linus from Charlie using the mailbox rule, the contract was valid and became effective upon acceptance. Linus is entitled to the $500 originally offered by Charlie. Vet Emporiums is already bound by contract to perform a certain duty and should not be compensated for their negligence of duty, but should remedy Charlie for the loss and harm they caused Woodstock. It would not be prudent for Vet Emporium to compensate Sally for the return of Woodstock because the advertisement posted contained conditional precedent for the return to their office. Sally is entitled to the payment of $100 from Charlie since he orally expressed his intentions to reimburse Sally for finding and caring of Woodstock. Lucy should recover an additional $325.00 in compensatory damages and for other fees incurred to obtain performance from another source. Schroeder signed the prenuptial agreement voluntarily and the promises made by Lucy were not stipulated in the agreement so ther e are no grounds for compensation. Lucy should pay the attorney because of his negligence, malpractice and misrepresentation to practice law. Lucys attorney should be suspended for failure to pay his bar dues and the courts in the state where he practices should review all his cases. Pigpen should received compensation of his earnest money funds from Marcie and the contract should be voided for breach by Marcie. Lucys contract with Marcie is void because of the conditional precedent that Marcie placed upon the offer. Without the sale of her home, there is no valid contract with Lucy. The moms had a right from Schroeder to perform his contractual duty and should be compensated nominally for damages suffered. Peppermint Patty performed her obligations under this contract and Schroeder should pay for those services rendered, regardless of the satisfaction of the customers. That satisfaction is the responsibility of Schroder since he was the obligor. References: Clarkson, Miller, Jentz, and Frank B Cross (2009). Business Law, Text and Cases, 11th Ed., South-Western Lexis-Nexis Legal Research