Q.I. Brian has purchased a new Toyota Camry and
offers to sell his used 1998 Honda Civic to his neighbour, Amanda. Brian’s
written offer states, “I, Brian, will sell Amanda my 1998 Honda Civic for
$2500, $1000 as a down payment and the remaining balance financed at 10%
interest, with monthly payments of $300.”
Amanda responds with a following written acceptance, ” I will purchase Brian’s 1998 Honda Civic for $2500, $1000 down payment, the remaining balance financed at 10% interest, with monthly payments of $300. Brian agrees to have the oil changed and the car detailed before delivery.”
- What rule will be applied to determine if the acceptance with additional terms is effective?
The U.C.C. Battle of the
Forms would be used.
- Why would that rule apply?
This rule would be used because additional terms were included in the acceptance in regards to the sale of a kind (August et al. 2012). Because Amanda added other terms does not necessarily make the offer ineffective because the U.C.C. tries to promote and facilitate commercial transactions through this since most business transactions involve fine print and other conditions (CHARLES, D. 2013).
- Was acceptance effective and as such, created a contract between the parties?
If there is a definite expression of acceptance, then the approval will be valid despite the additional terms (Clark, R. C. 2016).
- How will the additional term be treated?
The additional terms would
be treated as an agreement between non-merchants. Therefore, the other terms
included in the acceptance do not become part of the contract. The conditions
will be treated as proposals for addition to the agreement and can, therefore,
be rejected or accepted by the offeror. This can be an implied or expressive
acceptance.
Q.I.I. Kate, a licensed the masseuse, sends the following
written offer to Josh, a former client, “Kate will sell Josh a massage
package with ten 90 minute deep tissue massages for $500. All messages must be
scheduled at least one week in advance. Payment is due upon receipt of service
and must be made in cash or by credit card”.
Josh
responds to Kate’s offer with the following written acceptance, “Josh
agrees to purchase Kate’s massage package with ten 90 minute deep tissue
massages for $500. All messages must be scheduled at least one week in advance.
Payment is due upon receipt of service must be made in cash or by credit card.
Josh may cancel and reschedule any scheduled massage appointment with 24-hour
notice.”
- What rule will be applied to determine if the acceptance with additional terms is effective?
The Mirror Image Rule
would be used.
- Why would that rule apply?
This rule would be
implemented because it involves additional conditions added to a contract in
regards to personal services or property.
- Was acceptance effective and as such, created a contract between the parties?
The approval by the offeree had to be the mirror image of the offer to be effective. If there were additional terms included in the recognition, it would not be an effective acceptance because it did not match the original proposal (Locker, K. O., & Kienzler, D. S. 2010).
- How will the additional term be treated?
The other conditions would
be treated as a counteroffer which the offeror could either accept or reject by
expression or implication.
QIII. Greentree Plant Nursery sends Leafy
Landscaping the following notice ” All one-gallon ornamental bushes can be
purchased at $13.00 a unit. Greentree will deliver the bushes to the buyer’s
place of business. Payment to be made by cash or credit card.”
Leafy
Landscaping then sends the following preprinted purchase order for 80 one
gallon ornamental bushes. The purchase
order includes the term “Greentree agrees to provide a 10% discount on all
ornamental bushes not delivered to the buyer within 30 days of the date of this
purchase order.”
- What rule will be applied to determine if the purchase order with additional terms is effective?
The U.C.C. Battle of the
Forms rule would be used.
- Why would that rule apply?
This rule would be involved because additional terms were included in the acceptance in regards to the sale of a good. Because Leafy Landscaping added other terms does not necessarily make the offer ineffective because the U.C.C. tries to promote and facilitate commercial transactions through this since most business transactions involve fine print and additional conditions (Pierce, R. J., & Davis, K. C. 2012).
- Was the acceptance effective and as such, created a contract between the parties?
The additional terms under
this rule would be practical and treated as part of the agreement between the parties
because both parties are merchants.
- If so, does the additional term become part of the contract?
Yes
- Assuming it does, is there any way Acme could prevent the other term from becoming part of the deal?
Acme prevent the
additional term from becoming part of the agreement by claiming: 1) The offer
expressly limits acceptance to the terms of the offer, 2) The other conditions
materially alter the offer or 3) Acme can reject the other words within ten days
after receiving it.
Part B (Chapter 12): The
attached questions deal with the element of consideration. Did each party
exchange something of sufficient legal value to meet the element of concern and
thus create a contract? Do not examine other aspects of the agreements, just
the component of interest.
1. Patty
offers to bake Mark a pumpkin pie if he promises to paint her house, wash her
car and build a fence around her back yard.
Mark accepts Patty’s offer. After
washing Patty’s car, Mark decides that Patty has taken advantage of him and
tells her that he will not paint her house or build the fence. Patty performs as she promised and sues for
breach of contract. Did both parties
provide adequate consideration to create a binding agreement? Explain why or
why not.
Both parties provided
adequate consideration to create a binding contract. Matt accepted Patty’s
offer and promised to perform a task in exchange for a good. In a bilateral agreement,
a promise to deliver is sufficient enough to establish the element of
consideration (Metzger
et al. 2019). He cannot back out on his pledge simply because the amount of
work he did had more value than a pumpkin pie. Monetary worth is not something
that will be examined by a court.
2. Jerry is a part-time college student. On Wednesday he notices that his neighbour,
Mrs Smith, has had a load of wood delivered.
Jerry has a lot of time on his hands a decides he would enjoy splitting
and stacking Mrs Smith’s wood. He tells
Mrs Smith that on Saturday he will cut and stack her wood. Mrs Smith is very excited, and thanks to
Jerry several times. On Saturday Jerry
gets up late and decides he would rather spend the day on the couch watching
football. Mrs Smith has to pay someone else to split and stack the wood. Mrs Smith sues Jerry for breach of
contract. Did both parties provide
adequate consideration to create a binding agreement? Explain why or why not.
Both parties did not
provide adequate consideration and therefore, did not create a binding contract.
Jerry offered to cut Mrs Smith’s wood without asking for or receiving anything
in return. This is considered a gratuitous promise and these types of
obligations do not form contracts. This agreement held no legal value (what is
exchanged to create a binding contract).
3. Mandy has inherited a large amount of money
and decides she would like to do something beautiful for her friend Devon.
Devon has been dating a real loser named Wally.
Mandy tells Devon that she will give Devon $5000 if Devon promises not
to date Wally anymore. Devon broke up
with Wally earlier in the week, so she accepts Mandy’s offer. Later Mandy and Devon have a falling out, and
Mandy refuses to give her the $5000.
Devon sues Mandy for breach of contract.
Did both parties provide adequate consideration to create a binding
agreement? Explain why or why not.
I do think Mandy and Devon
have provided adequate consideration to create a binding contract. Mandy agreed
to pay Devon 5000 dollars if she stopped seeing Wally. Since Devon continued
not to date Wally Many is obligated to pay her $5000. However, I think it is
unhonest of Devon to agree to this contract when, unbeknownst to Mandy, she had
already broken up with Wally before. I could not find anything throughout the
text supporting that this should be grounded not to provide adequate
consideration, but I think there should be something.
4. Cindy is running for mayor of La Grande. She
recently broke with her boyfriend, Steve.
Cindy is aware that Steve is very hurt and quite vindictive. Cindy is concerned that Steve may be making
defamatory statements about her. She
thinks that such rumours might jeopardize her chance of being elected. Cindy
offers to give Steve $500 if he promises not to spread any untrue, defamatory
statements about her until after the election. Steve accepts her offer. After Cindy is elected, he tries to collect
the $500, but Cindy refuses to pay.
Steve sues for breach of contract.
Did both parties provide adequate consideration to create a binding
agreement? Explain why or why not.
Both parties did not provide adequate consideration to create a binding contract. Because defamation is illegal, Cindy is not obligated to pay Steve $500 for not making defamatory statements about her. The preexisting legal duty exception explains this. A promise to do something (or in this case refraining from doing something) that one is already legally obligated to do is not sufficient to create the element of consideration (Palmer et al. 2018).
5. Fernando is a famous sculptor who, in his
later years, has developed arthritis. He
still sculpts but only when his hands aren’t hurting. Mrs Howell has wanted
Fernando to create a bust of her husband for years, but he has always been too
busy. Fernando finally has the time, and Mrs Howell has Fernando sign the
following agreement “Fernando agrees to create a bust of my husband if he
feels he can without too much discomfort, and in return, I agree to pay him
$4000.” Did both parties provide
adequate consideration to create a binding contract? Explain why or why
not.
Both parties did not provide adequate consideration because by agreeing to this contract, Fernando is making a false promise. Fernando is not bound to the pledge because he may never be able to complete the task without discomfort (Petty, R. D. 2012).
6. Will sues Joe and is awarded a $40,000 judgement. Joe claims that he can not pay the $40,000 and offers instead to give Will $15,000 and to paint his house. Will agrees and accepts the $15,000 and has Joe paint his house. Later Will asserts that Joe still owes him $25,000. Did both parties provide adequate consideration to create a binding debt adjustment agreement? Explain why or why not.
When a debtor promises to
pay less than he owes his promise is not sufficient consideration. An agreement
to accept a partial payment for a liquidated debt does not create a contract.
References
August, R., Mayer, D., & Bixby, M. B. (2012). International business law. Pearson Education, Limited.
CHARLES, D., (2013). Law of partnership. London, Sweet and Maxwell.
Clark, R. C., (2016). Corporate law (p. 123). Boston, MA: Little, Brown.
Locker, K. O., & Kienzler, D. S. (2010). Business and administrative communication.
Metzger, M. B., Mallor, J. P., Barnes, A. J., & Bowers, T. (2019). Business law and the regulatory environment: Concepts and cases. Irwin.
Palmer, G. E., Kaplan, L., & Whittemore, G. F., (2018). The law of restitution (Vol. 4). Boston: Little, Brown.
Petty, R. D., (2012). The impact of advertising law on business and public policy (p. 38). Westport, CT: Quorum Books.
Pierce, R. J., & Davis, K. C. (2012). Administrative law treatise (Vol. 1). New York, NY: Aspen Law & Business.
