Wrench LLC v Taco Bell

Business Law Unit III
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Critical Legal Thinking
Wrench LLC v. Taco Bell Corporation,
Doctrine of implied-in fact contract provide
The implied-in-fact contract is not really created but is inferred from the circumstances depending on the surrounding circumstances and non-verbal conduct during deliberations. Even though, there is no express contract, it is reasonable to assume that there was tacit agreement between the parties involved as though there was a contract. Nonetheless, the plaintiff expects payment after having offered services to the defendant gratuitously. The contract is presumed to exist when the defendant tacitly accept to benefit even if it is possible to decline.
Taco Bell and Chiat/ Day unethical practice
Taco Bell did not act ethically, as there was an implied-in-fact contract, given that Wrench LLC provided services, suggesting the use of the Chihuahua for Taco Bell’s advertisements. In any case, there was communication after the initial contact, and Wrench LLC expected some form of compensation. Even though, the defendant later on accepted the idea of Chiat/Day which was inspired by the plaintiff, it was as though they had breached the contract. Additionally, Chiat/Day acted unethically by using an idea already proposed by the defendant’s potential client. Chiat/ Day claimed that their idea was original, but use of Chihuahua in commercials had already been conceived by the plaintiff.Recognizing implied-in fact contracts
The implied-in-fact contract is enforceable like an express contract, since the parties to a contact expect some form of compensation. Hence, the implied-in fact contract makes it possible to offer compensation to avoid unfair results and injury to the persons who expected such compensation. In any case, the defendant already benefited from the contact with the plaintiff, and it is only fair and just to compensate the plaintiff. The compensation would have been awarded depending on the estimated sale up to the time the case was heard.
Law Case
California and Hawaiian Sugar Company v. Sun Ship, Inc.
The use of the liquidated damages clause is important for any business contract as it protects against a possible breach of contract. In other words, a party in breach of contract is legally bound to provide compensation for a breach, but the amount and terms must be agreed upon by both parties and written. In the commercial context, the clauses depend to be upheld highlighting there benefits to parties in a contract. The injured party can rely on the LD clause to sue for compensation rather than going through a lengthier court process for breach of contract. Thus, if a party fails to fulfill their part of the bargain based on promised performance, the liquidate damages takes effect.
The liquidated damages clause is also useful when parties prefer certainty to risk and cost related to proof that there were actual damages. In other words, business contacts resulting to monetary exchange need to have the liquidated damages contract. In case of litigation, the options are narrowed down, as both parties are in agreement about the liquidated damages. Even though, the liquidated damages clause is like an indemnity, it is onl...