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Law
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CONTRACTS (Essay Sample)

Instructions:
BLE 214 Summer 2012 Essay You are the CEO and founder of a company that installs high-end fences. You obtain the expensive fences from a supplier and pass along the cost of the fences to your customers along with your labor costs for the installation. You are listening to the radio one day when you hear Ronnie disparaging your business. You decide to play a practical joke on Ronnie by pretending to sell him your vacation home in the Cayman Islands. You tell your friend Vinnie that you have no intention of selling Ronnie the home. The home is assessed at $10 million but you offer Ronnie the home for $50,000. You wink and smile at Ronnie as you make the offer. Ronnie gladly accepts the offer and the two of you shake hands. Ronnie quits his job and moves to the Cayman Islands where you inform him you never had any intention of selling your home while he is moving furniture and trimming the hedges. Of course, you never mentioned that you own a second home in the Cayman Islands that was recently destroyed in a hurricane. A. Discuss whether there is a valid offer and acceptance and, further, discuss whether there is an enforceable contract. You are making lots of money from your fence business so you decide to build a new home with a large Jacuzzi. You compile specifications for the construction of the home and you send it to several general contractors so they may provide bids/quotations. Part of the general contract includes a large plumbing sub contract. Situation Construction submits a bid to you for $20 million to serve as the general contractor. As part of its general bid, Situation Construction factored $1 million for plumbing based upon a sub bid submitted by Snookie Plumbing. There were two other bids for the plumbing work. Situation Construction and Snookie Plumbing have a falling out and Snookie Plumbing no longer wants to work on the project. The two other bids were for $10 million each respectively. B. Discuss whether Snookie Plumbing may revoke its offer. What are the competing arguments? Are there any other important facts? You and MTV supplier have orally agreed upon a contract in which MTV will supply the unique and specialized wood that you use to construct your fences for $20 million. One year later, MTV supplier approaches you to complain about the dramatic increase in the cost of raw material. MTV tells you that it can only complete the delivery for an additional $2 million. You are sympathetic and you agree to the $2 million increase in a signed writing. C. Discuss whether there is an enforceable contract and, further, the amount you owe MTV upon receipt of the material. A potential customer, Angelina, has asked you to provide a quote on a fence for her mansion in Beverly Hills. You provide a quotation of $20,000 in a signed writing. You attest in a signed writing that the quotation is valid for sixty days. The next day, you notice that the cost of materials has increased so you call Angelina and tell her that you are revoking your offer but she claims that she already accepted. Two minutes later you receive a text message from Angelina accepting the $20,000 quotation. D. Discuss whether you may revoke your offer and whether there is an agreement. Your business is expanding so you decide to hire an assistant. You have had problems in the past with people using illegal drugs on the job so you condition an offer of employment to J-Wow on her passing a drug test. You call J-Wow on the telephone and say “I will employ you for the rest of your life as my assistant so long as you pass a drug test.” J-Wow passes the drug test but when she comes to the office to sign the employment agreement you tell her that you no longer want to hire her. E. Discuss whether you may revoke your employment offer and whether there is an enforceable contract. In addition to running a fence company, you also own a small bed and breakfast. One day, Sammy, a person looking at least 30 years old comes to your bed and breakfast. You agree to rent her a room at your standard rate of $100 per night for the next two years. It turns out that Sammy just turned seventeen the day she met with you. Eighteen months later, she has not paid for a single night and claims that he owes you nothing. Further, you inspect the room and realize that Sammy has caused $5,000 in damages. F. Discuss how much, if anything, Sammy owes you. source..
Content:

CONTRACTS
Name:
Grade Course:
Tutor`s Name:
(19th June, 2012)
Contracts
For a contract to be valid, a number of requirements must exist. These are a valid offer which must be agreed upon by both contracting parties and an acceptance by the offeree. This two will make a contract valid upon existence. The law doesn`t recognize practical jokes. It may be very unfortunate if a person wanted to make a practical joke and in the event sold property to another for a consideration lower than the current market value. On this point, I want to add that consideration is the third requirement for a valid contract. It will be important to also note that this consideration must be something. It cannot be anything. This means that this house could have as well be sold for a mere dollar. The contract would have still been a valid one.
The situation is quite an obvious one. Having agreed, and shaken hands with Ronnie, it indicated that I had offered and Ronnie had accepted to it and agreed to pay the consideration of 50,000 bucks as stated. From this moment on the contract had effected. The parties were only left to perform their obligations as per the contract. The contract even sealed further by allowing Ronnie to quit his job and move to the premises. On my part this was an acceptance by implication. The fact that real intention to contract did not exist does not matter. Intention or lack of it should be effectively communicated to the contracting offeree and not third parties.
The conclusion is therefore that the property will move to Ronnie, and any efforts to prevent this or refusal to perform as per the contract on the part of the offeror will amount to a breach of contract.
Generally, a simple falling out is not one of the reasons for revocation of a contract. Common grounds of revocation involve situations where there was a mistake of fact. Parties nevertheless still possess the right to revoke. The effect of revocation of a contract is termination. Termination of a contract by means of revocation can however only occur before acceptance of an offer. This means anytime before acceptance by the required party. Considering the offer made by snookie plumbing for one million dollars, and the other two extravagant ones, I can safely assume that snookie`s offer had been accepted quickly. To later come back saying that they want to revoke because of a falling out, will amount to breach of contract on the part of snookie plumbing as sub contractors.
Usually when parties enter into a contract the terms and conditions are what translate to the duties and obligations of the contracting parties. This means that the parties will be bound by exactly what are in the terms of the contract and no more or less. Therefore in regard of this, the consideration agreed upon at the date of creation of the contract is the one which will be paid until the contract terminates. If there are any price increases after that, the offeree will decide whe...
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