Foodmart, Inc. Learning Team Assignment Paper
Foodmart, Inc.
Learning Team Assignment
LAW/421
Foodmart, Inc.
Part 1 In order to provide a detailed assessment of the above mentioned scenario, a clear understanding of each step in the contract must be clear. A contract was established between Foodmart and Masterpiece Construction for renovation to one of Foodmart’s stores. With a deadline approaching, and an increase in contract requests, Masterpiece was not able to complete expectations of this contract. To remedy the situation, Masterpiece delegated the job to another company- Build to Them to Fall Construction.
According to Melvin (2011) parties in a contract may delegate, or transfer contract duties to a third party. Masterpiece, also known as the delegator, is giving the contract responsibilities to Build, also known as the delegatee. It is important to note that in the case of delegation, the delegator (Masterpiece) is still liable to Foodmart, but is not obligated to share the change with the original party, in this …show more content…
case Foodmart. However, should Build not perform to contract specifications, Masterpiece can be held liable for breach of contract. There are only three exceptions which would prohibit the option to delegate duties. These include contract duties which include special personal skills, anti-delegation clause in the contract, or delegatee is a competitor.
Masterpiece did have another option to resolve its contractual obligation. By using the option of assignment, transfer of obligations could have been moved to Build and all liability transferred. However, for this to become a binding agreement, Foodmart would have to be made aware of the transfer. Melvin (2011) indicates that under the option of assignment, all contract liability would have moved to the third party, in this case Build.
According to FindLaw (2013), impracticability is defined as “doctrine in contract law: relief from obligations under a contract may be granted when performance has been rendered excessively difficult, expensive, or harmful by an unforeseen contingency.” As a defense, Masterpiece used this claim to assign the contract to a third party. Melvin (2011) supports this definition. Under the concept of commercial impracticability, the UCC allows for such a defense when it can be proved that the original contract holder was affected by unforeseeable challenges. Masterpiece does explain that the third party was brought in after a surge in new contracts made it impossible for Masterpiece to deliver on the contract obligations with Foodmart.
Foodmart has petitioned the courts with an injunction, or an order to cease activity against Masterpiece. Foodmart has also filed a law suit claiming breach of contract and specific performance. According to Melvin (2011) there are four different types of remedy to resolve a breach of contract: compensatory, consequential damages, restitution, and liquidated damages. For the purpose of this case, Foodmart should seek compensatory damages. This would allow Foodmart to complete its renovation of the Main Street location, as specified in the original contract. The second claim describes charges which include specific performance. According to Melvin (2011) specific performance is a remedy that requires the breaching party to act on the failure to comply by the contractual obligations. Foodmart has the right to claim this charge. Financial compensation should be made as a result of breach of contract. Specific performance will require that Masterpiece update and replace any renovation deemed of poor quality.
In closing, Foodmart will win its case against Masterpiece with charges that include breach of contract and specific performance. Masterpiece will have to provide monitory compensation, and replace any poor quality work completed by Build. If only Masterpiece has used the option to assign Build with the new contract requirements, all liability for poor workmanship would have moved to the Build Construction Company.
Part 2
According to Melvin, the necessary element to make a contract legal is that each person must have capacity (courts will only enforce a contract for those that have legal capacity). People who are protected by this are: minors and those with mental incapacities. “In these cases, parties may seek to avoid (cancel) the contract immediately or they may enforce the contract with the option of avoiding it at any time up until the time they regain capacity. One the party has regained capacity, the contract becomes binding on both parties” (Melvin, 2011). In legal terms, a minor is referred to as an infant and anyone that is under the age of 18. When a minor voids a contact, the other party may be entitled to some money, if the minor gained anything while the good was in their procession or if the minor caused damages to the good. There can be some exceptions to these capacities, such as a minor cannot avoid a contract after purchasing food, shelter, clothing, or any other necessities.
The legal outcomes are that the used car company takes the car back and refunds the money because they had no legal right to enter into a contract with Jeremy to begin with as Jeremy was under age, per capacity. The money needs to be refunded to the minor. According to Nolo, if the minor does enter into a contract they can either end it or go ahead and fulfill the contract. The person is thought to lack capacity to be forced to fulfill the contract. One exception to this is if the minor has turned 18 and has continued to fulfill his or her part of the contract. The minor may also be liable to pay for any damages or depreciation that happened to the vehicle while in their procession. The minor must return the property (car) to the used car company.
Another legal outcome is that Jeremy keeps the car, gets another part time job and continues to pay on the car. Legally, the minor can keep the contract until he is of age. As long as both parties agree to this they will be able to keep this contract.
The parents of the minor may wish to sue Smooth Sales Used cars for selling to their minor child. It was negligent of them because their behavior falls short of the level of care they should be providing that someone of “ordinary prudence would have exercised” under similar circumstances (Cornell University Law School, 2010).
Part 3
Brian and Harry entered into a verbal contract. According to Melvin, (2011) a contract is a promise or a set of promises enforceable by law. Brian stated that when he retires he will offer his trains to Harry because he knew Harry would take care of them. Harry told Brian he looked forward to the day when he could buy the trains.
A contract is formed when an offer by one party is accepted by the other party ("The Law Handbook", 2013). Brian extended an offer of selling his trains to Harry. Harry accepted the offer by stating he looked forward to buying the trains.
When Brian retired he sold his trains to James causing a breach of contract. According to "Us Legal.com" (2013), “Breach of contract means failing to perform any term of a contract without a legitimate legal excuse. The contract may be either written or oral. A breach may include not finishing a job, failure to make payment in full or on time, failure to deliver all the goods, substituting inferior or significantly different goods, not insuring goods, among others.”(Breach of Contract Law & Legal Definition).
Proof of a verbal breach of contract must be provided by Harry, he must prove that the conversation took place, what the terms were and that both parties understood the contractual relationship. If Brian disagrees with the verbal communication as far as what words where actually said Harry must be able to prove that the statements where said and binding. There were no witnesses to the verbal communication that took place ("Senior Magazine Online", 2013). Upon accepting the oral contract with Brian, Harry began preparing to purchase the trains. Harry’s preparations for the trains included adding space to his home for the trains and borrowing money from his aunt to purchase the trains. Actions can serve as corroborating evidence ("Senior Magazine Online", 2013).
Harry is also reviewing as to whether he can sue under the bases of promissory estoppel which means that “a legal principle that prevents a person who made a promise from reneging when someone else has reasonably relied on the promise and will suffer a loss if the promise is broken.” ("Cornell Law", 2013). “Not all promises are legally enforceable. A promise to pay a cash gift for graduation is not an enforceable promise. For a binding contract to exist there must be not only agreement (i.e., offer and acceptance) but the agreement must be supported by consideration. The function of consideration is to distinguish between those promises that are binding on the promisor and those that are not. For most contracts, a court will not enforce a promise unless the promisee has been given consideration for the promise. If either party to a contract has not given consideration, the agreement is unenforceable, unless it falls under one of the exceptions (Melvin, 2011). Harry gave consideration to the promise of the purchase of the trains by expanding his home and borrowing the money from his aunt to purchase the trains.
.
References
Cornell Law. (2013). Retrieved from http://www.lawcornel.edu
Cornell University Law School (2010). Legal Information Institute. Retrieved from http://www.law.cornell.edu/wex/negligent
FindLaw (2013) Impracticability http://dictionary.findlaw.com/definition/impracticability.html#sthash.nKH7O4zu.dpuf Melvin, S. P. (2011). The legal environment of business: A managerial approach: Theory to practice. New York, New York: McGraw-Hill/Irwin.
Nolo (n.d.) Stim,R. Who lacks the capacity to contract. Retrieved from http://www.nolo.com/legal-encyclopedia/lack-capacity-to-contract-32647.html
Senior Magazine Online. (2013). Retrieved from http://www.seniormag.com/legal/oralcontracts.htm
The Law Handbook. (2013). Retrieved from http://www.lawhandbook.org.au/handbook/ch12s01s02.php
US Legal.com. (2013). Retrieved from
http://definitions.uslegal.com/b/breach-of-contract/
Learning Team Assignment
LAW/421
Foodmart, Inc.
Part 1 In order to provide a detailed assessment of the above mentioned scenario, a clear understanding of each step in the contract must be clear. A contract was established between Foodmart and Masterpiece Construction for renovation to one of Foodmart’s stores. With a deadline approaching, and an increase in contract requests, Masterpiece was not able to complete expectations of this contract. To remedy the situation, Masterpiece delegated the job to another company- Build to Them to Fall Construction.
According to Melvin (2011) parties in a contract may delegate, or transfer contract duties to a third party. Masterpiece, also known as the delegator, is giving the contract responsibilities to Build, also known as the delegatee. It is important to note that in the case of delegation, the delegator (Masterpiece) is still liable to Foodmart, but is not obligated to share the change with the original party, in this …show more content…
case Foodmart. However, should Build not perform to contract specifications, Masterpiece can be held liable for breach of contract. There are only three exceptions which would prohibit the option to delegate duties. These include contract duties which include special personal skills, anti-delegation clause in the contract, or delegatee is a competitor.
Masterpiece did have another option to resolve its contractual obligation. By using the option of assignment, transfer of obligations could have been moved to Build and all liability transferred. However, for this to become a binding agreement, Foodmart would have to be made aware of the transfer. Melvin (2011) indicates that under the option of assignment, all contract liability would have moved to the third party, in this case Build.
According to FindLaw (2013), impracticability is defined as “doctrine in contract law: relief from obligations under a contract may be granted when performance has been rendered excessively difficult, expensive, or harmful by an unforeseen contingency.” As a defense, Masterpiece used this claim to assign the contract to a third party. Melvin (2011) supports this definition. Under the concept of commercial impracticability, the UCC allows for such a defense when it can be proved that the original contract holder was affected by unforeseeable challenges. Masterpiece does explain that the third party was brought in after a surge in new contracts made it impossible for Masterpiece to deliver on the contract obligations with Foodmart.
Foodmart has petitioned the courts with an injunction, or an order to cease activity against Masterpiece. Foodmart has also filed a law suit claiming breach of contract and specific performance. According to Melvin (2011) there are four different types of remedy to resolve a breach of contract: compensatory, consequential damages, restitution, and liquidated damages. For the purpose of this case, Foodmart should seek compensatory damages. This would allow Foodmart to complete its renovation of the Main Street location, as specified in the original contract. The second claim describes charges which include specific performance. According to Melvin (2011) specific performance is a remedy that requires the breaching party to act on the failure to comply by the contractual obligations. Foodmart has the right to claim this charge. Financial compensation should be made as a result of breach of contract. Specific performance will require that Masterpiece update and replace any renovation deemed of poor quality.
In closing, Foodmart will win its case against Masterpiece with charges that include breach of contract and specific performance. Masterpiece will have to provide monitory compensation, and replace any poor quality work completed by Build. If only Masterpiece has used the option to assign Build with the new contract requirements, all liability for poor workmanship would have moved to the Build Construction Company.
Part 2
According to Melvin, the necessary element to make a contract legal is that each person must have capacity (courts will only enforce a contract for those that have legal capacity). People who are protected by this are: minors and those with mental incapacities. “In these cases, parties may seek to avoid (cancel) the contract immediately or they may enforce the contract with the option of avoiding it at any time up until the time they regain capacity. One the party has regained capacity, the contract becomes binding on both parties” (Melvin, 2011). In legal terms, a minor is referred to as an infant and anyone that is under the age of 18. When a minor voids a contact, the other party may be entitled to some money, if the minor gained anything while the good was in their procession or if the minor caused damages to the good. There can be some exceptions to these capacities, such as a minor cannot avoid a contract after purchasing food, shelter, clothing, or any other necessities.
The legal outcomes are that the used car company takes the car back and refunds the money because they had no legal right to enter into a contract with Jeremy to begin with as Jeremy was under age, per capacity. The money needs to be refunded to the minor. According to Nolo, if the minor does enter into a contract they can either end it or go ahead and fulfill the contract. The person is thought to lack capacity to be forced to fulfill the contract. One exception to this is if the minor has turned 18 and has continued to fulfill his or her part of the contract. The minor may also be liable to pay for any damages or depreciation that happened to the vehicle while in their procession. The minor must return the property (car) to the used car company.
Another legal outcome is that Jeremy keeps the car, gets another part time job and continues to pay on the car. Legally, the minor can keep the contract until he is of age. As long as both parties agree to this they will be able to keep this contract.
The parents of the minor may wish to sue Smooth Sales Used cars for selling to their minor child. It was negligent of them because their behavior falls short of the level of care they should be providing that someone of “ordinary prudence would have exercised” under similar circumstances (Cornell University Law School, 2010).
Part 3
Brian and Harry entered into a verbal contract. According to Melvin, (2011) a contract is a promise or a set of promises enforceable by law. Brian stated that when he retires he will offer his trains to Harry because he knew Harry would take care of them. Harry told Brian he looked forward to the day when he could buy the trains.
A contract is formed when an offer by one party is accepted by the other party ("The Law Handbook", 2013). Brian extended an offer of selling his trains to Harry. Harry accepted the offer by stating he looked forward to buying the trains.
When Brian retired he sold his trains to James causing a breach of contract. According to "Us Legal.com" (2013), “Breach of contract means failing to perform any term of a contract without a legitimate legal excuse. The contract may be either written or oral. A breach may include not finishing a job, failure to make payment in full or on time, failure to deliver all the goods, substituting inferior or significantly different goods, not insuring goods, among others.”(Breach of Contract Law & Legal Definition).
Proof of a verbal breach of contract must be provided by Harry, he must prove that the conversation took place, what the terms were and that both parties understood the contractual relationship. If Brian disagrees with the verbal communication as far as what words where actually said Harry must be able to prove that the statements where said and binding. There were no witnesses to the verbal communication that took place ("Senior Magazine Online", 2013). Upon accepting the oral contract with Brian, Harry began preparing to purchase the trains. Harry’s preparations for the trains included adding space to his home for the trains and borrowing money from his aunt to purchase the trains. Actions can serve as corroborating evidence ("Senior Magazine Online", 2013).
Harry is also reviewing as to whether he can sue under the bases of promissory estoppel which means that “a legal principle that prevents a person who made a promise from reneging when someone else has reasonably relied on the promise and will suffer a loss if the promise is broken.” ("Cornell Law", 2013). “Not all promises are legally enforceable. A promise to pay a cash gift for graduation is not an enforceable promise. For a binding contract to exist there must be not only agreement (i.e., offer and acceptance) but the agreement must be supported by consideration. The function of consideration is to distinguish between those promises that are binding on the promisor and those that are not. For most contracts, a court will not enforce a promise unless the promisee has been given consideration for the promise. If either party to a contract has not given consideration, the agreement is unenforceable, unless it falls under one of the exceptions (Melvin, 2011). Harry gave consideration to the promise of the purchase of the trains by expanding his home and borrowing the money from his aunt to purchase the trains.
.
References
Cornell Law. (2013). Retrieved from http://www.lawcornel.edu
Cornell University Law School (2010). Legal Information Institute. Retrieved from http://www.law.cornell.edu/wex/negligent
FindLaw (2013) Impracticability http://dictionary.findlaw.com/definition/impracticability.html#sthash.nKH7O4zu.dpuf Melvin, S. P. (2011). The legal environment of business: A managerial approach: Theory to practice. New York, New York: McGraw-Hill/Irwin.
Nolo (n.d.) Stim,R. Who lacks the capacity to contract. Retrieved from http://www.nolo.com/legal-encyclopedia/lack-capacity-to-contract-32647.html
Senior Magazine Online. (2013). Retrieved from http://www.seniormag.com/legal/oralcontracts.htm
The Law Handbook. (2013). Retrieved from http://www.lawhandbook.org.au/handbook/ch12s01s02.php
US Legal.com. (2013). Retrieved from
http://definitions.uslegal.com/b/breach-of-contract/