Business laws
1. For each of the following agreements, explain fully:
a) whether the mistake was mutual or unilateral;
b) whether the mistake involved a material term of the contract;
c) whether the fairness of the situation would be grounds for arguing that enforcement of the contract was unconscionable; and
d) whether the customer could seek to void the contract on the basis of mutual mistake.
(define mutual/unilateral mistake, identify material terms, discuss fairness and/or unconscionable factors of the contract, then analyze and support your conclusion as to whether the contract is voidable.)
a. When Rick and Ellen booked a caterer to help host a celebration for their 50th wedding anniversary on Sept 5, 2014, they did not realize that their anniversary fell on Rosh Hashanah, a Jewish high holy day. Ellen had not practiced her Judaism faith since she married into a catholic family, but she realized that none of her Jewish relatives would attend the event, so she called the caterer to change the date. The caterer pointed out that the contract had a no cancellation provision that required a payment of $1000 for any change in the date of an event.
b. Gustav entered into a contract with the RTA to display 2ft x 4ft posters on the back of the RTA busses advertising his auto repair business, which specialized in repairs to cars made in Germany. He agreed to pay the cost of having the posters displayed for 6 months on all the busses which operated on Route 23, which passed through the community with a higher concentration of owners driving BMW and Mercedes vehicles. A month later, he discovered that due to budget cuts, Route 23 had been cancelled and that his posters were now being displayed on Route 43 which only drove through a poverty stricken community, where few residents owned any kind of car.
2. An adoption service, Cosmos Creations, sets up a surrogacy agreement with Skylar, a young, single mother of two healthy children. Skylar does not read any terms of the contract because she is dazzled by the initial payment of $5,000 she desperately needs and the additional $20,000 she will receive at the end of 9 months when she hands the child over to his or her adoptive parents, Corey and Carey.
When Skylar is inseminated, she has no idea that the adoptive parents are both men, in a same-sex relationship. She meets them during her first ultra-sound appointment at the end of her first trimester. After a month of reflection and discussion of the issue with her friends and family, Skylar decides she cannot give up her child to a gay couple, and informs Cosmos of her intent to keep the baby.
Skylar is a resident of Wisconsin, which has no surrogacy law to validate the contract. However, a recent court ruling has found that such agreements are enforceable, as long as the mother is not forced to give up all of her parental rights. (In the recent Wisconsin case the court specifies that there are no facts in the record to indicate that the contract should be void or voidable due to misrepresentation, mistake, duress, undue influence or incapacity)
Skylar has no intention of giving up or sharing the child with a gay couple, and feels that she can void the contract based on their failure to inform her about the intended adoptive parents.
a) Discuss whether Skylar?s assent was affected by mistake, duress, undue influence, or none of these
b) Discussing whether the identity, back ground, or other information regarding the adoptive parents is a material or non-material asect of the contract) and
c) Discuss any reasons why it would or would not be unfair or unconscionable to enforce the contract, including anyethical reasons why the business should or should not acquiesce to Skylar?s position. All comments must be respectful in tone and content, and conclusions drawn based on the law, not on your personal opinion
3. For the following scenarios, identify whether the alleged misrepresentation is innocent, negligent or fraudulent. Remember to define the type of misrepresentation, apply the definition to the facts, and reach a conclusion.
a. When Vanessa signs a lease to open a small candy/cupcake shop in an historic building, she makes sure to ask, and is assured, that the shop has been renovated and recently inspected and met all necessary building codes. When Vanessa applies for a vendor?s license, she learns that she also needs a permit from the Health Department for selling food on the premises. When she applies for a permit, they schedule an inspection. She does not pass the inspection because she has added two small tables for patrons to have a cup of coffee with dessert; and she now needs a public restroom to allow customers to sit and eat inside the shop. The only restroom in the building is connected to space rented by an accountant, who is not open the same hours as the shop. The inspector informs her that to pass inspection she will need to build a public restroom for her customers. When Vanessa asks her landlord to pay for the renovations, because he had assured her that the shop met all codes, he states that her lease does not contemplate any food preparation or consumption on the premises, although no specific term in the lease addresses this issue.
b. Move My Boat, ?MMB? is a company that transports boats primarily to and from Michigan to Florida, for snow-birds who live south in the winter and north in the summer, for a flat fee of $800, plus taxes. A regular customer, Donald, buys a bigger boat and calls to book his annual boat transport. He mentions he has a new boat, but no one asks him the size of the boat; and he is promised that the standard price will apply. However, when MMB sees the new boat, they immediately know that it has to be transported as a ?wide load? because of its excessive size, and they will have to pay a special permit fee in every state of travel, add signage to the boat, and that it must be accompanied by a pilot and pole car to improve visibility and safety, which will drive the cost of the transport up to $3000. Donald threatens to call his lawyer, unless they honor the flat fee of $800 that he was promised.
4. For the following scenario, explain whether the contract is unenforceable due to duress. Remember to define the legal principle, and explain how you reached your conclusion by applying the facts to the law.
When Alexia graduated from OSU with a degree in Finance, and a minor in French & German, she felt lucky to find a job as an underwriter for a large investment firm, with offices all across America. However, when the firm got bought out by a European investment bank, Alexia saw most of her colleagues get laid off or transferred, reducing her department from 100 employees to 25 employees. When it became her turn to be called into the manager?s office, she expected a layoff notice, but instead they handed her a new employment contract, and clearly advised her that it contained numerous new terms, including a non-compete agreement. She quickly signed the contract without reading it, just relieved that she still had a job.
The next week she was told that they were relocating her to Europe. She decided to quit because her husband?s medical practice had just been established and he could not put his career on hold to move with her. However, when she turned in her resignation, she was reminded that the non-compete clause prohibited her from getting any job in finance within the next 3 years.
If she takes another job in finance and is sued for breach of the non-compete agreement, what argument regarding duress can she make that the agreement in not enforceable?
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