Contract Questions Case Studies: Who Wins?
Robert Briggs and his wife bought a house. Later, their mortgage payments fell behind, and they entered into an agreement orally to put their home up for sale to Emma Sackett and Winfield Sackett. Winfield and Emma Sackett ought to have paid the three months that Robert Briggs and his wife were behind in payment and any other future payments. An action was later filed by Robert Briggs after fifteen years to cancel the oral contract. This action was in violation of the Statue of Frauds and the Sacketts were evicted from the home.
In this case, the applicable issue may be the contract concerning real property interests; for the reason that, according to the Statute of Frauds, whichever contract that consists real property ownership interest transfers ought to be in writing so as to be enforced (Cheeseman, 2010 p.220). Winfield and Emma Sackett only had an agreement that was oral for the sale of the home. Verbal agreement alone may not be sufficient proof that they owned the property; however, an exception to the statute exists that is referred to as the rule of part performance, that permits the court to order contracts that are oral, for real property interest transfer or sale of land, to be purposely performed stipulated that, it has been performed partially and the performance may be essential in avoiding injustice (Cheeseman, 2010 p.224). Consequently, in this case, the winners would be Winfield and Emma Sackett since they had been making regular mortgage payments for the past fifteen years. These monthly payments indicate that they were in compliance with the rule of part performance. Devoid of a written contract for the home, the Sacketts still owns the home.
16.8. Specific Performance
Claiborne, Inc. wanted to have its renowned name on cosmetics and perfumes promoted; hence, the company entered into a joint-venture with Avon. The financial obligations of the joint-venture would equally be shared by the two parties. Later on, Avon wanted to “disengage” itself from the joint-venture and afterwards refused to manufacture and procure the line of cosmetics and fragrances for the joint-venture. Claiborne took legal action on Avon and sued the company for breach, and sought specific performance of the contract that it had entered with Avon.
Specific performance entails a bargain to be made among two parties. Stipulated that one party pulls out of the accord, at that moment, specific performance comes into play, and the bargain could be forced by the court to remain in place among the involved parties. Specific performance’s equitable remedy calls for the act promised in the accord, to be performed. This remedy may often be attractive to a non-breaching party, for the reason that, it offers the strict bargain that was promised under the written contract (Miller and Jentz, 2008). Specific performance may be ordered when damages are insufficient compensation. The exclusivity of Claiborne’s cosmetic line, as well as, its unique package, may be apparent in this case. Besides, money damages may not compensate Claiborne adequately for the obliteration of the Claiborne cosmetic line. The ultimate closure of a much-publicized business enterprise and its disappointment in supplying to stores would not enhance its reputation with customers, suppliers, retailers and distributors. Consequently, the money damages would not adequately compensate Claiborne for its reputation’s damage.
Specific performance may be appropriate, except where there may be an efficient breach. Therefore, a specific performance order may be an appropriate remedy in this case. In a sale of goods contract, the decree of specific performance may happen where the products are distinctive or where money damages may not compensate the petitioner, adequately (Cheeseman, 2010 p.260). Avon had a unique product; hence, specific performance may not be ruled out. Thus, Avon was ordered by the court, to fill and deliver in a diligent and timely manner, all the purchase orders that had been placed by Claiborne Inc., in accordance with the written contract.
18.2. Good or Service
Mr. Gulash required a swimming pool that was an above-ground; hence, he contracted Stylarama Inc. so as to construct the above-ground swimming pool. Later on, the wood on the above-ground swimming pool began to rot causing the wall to bubble. Stylarma was sued by Mr. Gulash for breach of contract and obscured merchantability’s warranty under the procession of Article 2 of the Uniform Commercial Code (UCC).
In this case, no transaction occurred that involved goods; hence, this case may not be subject to Article 2 of the UCC that pertains to the transaction of goods. The Uniform Commercial Code (UCC) classifies products as things that are tangible and moveable, during their identification time to the written contract (Cheeseman, 2010 p.282). The case of Mr. Gulash vs. Stylarama Inc. never fell under the Uniform Commercial Code (UCC) as a tangible and moveable good; for the reason that, the above-ground swimming pool may not be moveable. The construction of the above-ground swimming pool under contract was only a provision of service that may not be covered by Article 2 of the Uniform Commercial Code (UCC).
20.3. Revocation of Acceptance
Farrar Produce Company was interested in purchasing boxes to stock up tomatoes; thus, the company contacted the International Paper Company for boxes. A promise was made by the salesman of International Paper Company that, every box would approximately hold between twenty to thirty pounds of tomatoes. Farrar Produce Company made an order for 21,500 boxes that could store the tomatoes. The initial, few thousand boxes started to collapse when they were used, and they crushed the packaged tomatoes. Farrar Produce Company contacted the International Paper Company and alleged that the company no longer required the boxes that had remained. The International Paper company argued that Farrar Produce Company was legally responsible for the remaining packages and ought to pay for them since it had acknowledged the shipment.
In this case, the applicable issue may be the revocation of acceptance that states that a lessee or a purchaser who has acknowledged goods may consequently revoke the acceptance of the goods stipulated that, the goods may be non-conforming. The non-conformity to a large extent impairs the goods’ value to the lessee or to the purchaser. In this case, the products were acknowledged prior to the discovery of the non-conformity (Cheeseman, 2010 p.314). In reality, Mr. Farrar purchased products that were not up to standard as promised by the seller. These non-conforming products caused monetary damages since the tomatoes were spoilt; hence, the company lost goods that were of monetary value. Mr. Farrar’s revocation of acceptance may be valid since the purchaser notified the seller regarding the non-conformity of the products within a rational time subsequent to the receiving of the products.
A different issue, that may be applicable in this case, may be the fitness warranty for a particular reason under the Uniform Commercial Code (UCC). Sellers never warrant their materials to be fit for any particular purpose; nevertheless, unless the seller has compelling reason to have knowledge on the reason or purpose of the materials and that the purchaser may be relying on the judgment or skills of the seller to furnish or select appropriate goods (Fullerton, 2010). When International Paper Company was contacted, the salesman was informed of the purpose of the boxes; thus, he recommended this particular product. The salesman ought to have understood and also ought to have had prior knowledge to choose the appropriate product. Therefore, the boxes were not appropriate for packing, storage and shipping of the tomatoes for Farrar Produce Company. As a result, the victor in this case would be Farrar Produce Company.
Briggs v. Sackett, 275 Pa. Super. 13, 418 A.2d 586, (Superior Court of Pennsylvania, 1980).
Retrieved on Jan 13, 2015, from; http://www.leagle.com/decision/1980288275PaSuper13_1286.xml/BRIGGS%20v.%20SACKETT
Cheeseman, H. (2010). Business Law: Legal Environment, Online Commerce, Business Ethics,
and International Issues. (7th Ed.). Pearson Learning Solutions.
Fullerton, D. (2010). “Uniform Commercial Code Sale of Goods.” Retrieved on Jan 13, 2015,
Gulash v. Stylarama, 33 Conn.Supp. 108, 364 A.2d 1221, (Superior Court of Connecticut, 1975).
Retrieved on Jan 13, 2015, from; http://www.law.unlv.edu/faculty/rowley/Gulash.pdf
International Paper Co. v. Farrar, 102 N.M. 739, 700 P.2d 642. (Supreme Court of New
Mexico, 1985). Retrieved on Jan 13, 2015, from; http://www.leagle.com/decision/19851342700P2d642_11340.xml/INTERNATIONAL%20PAPER%20CO.%20v.%20FARRAR
Liz Claiborne, Inc. v. Avon Products, Inc., 141 A.D.2d 329, 530 N.Y.S.2d 425, (Supreme Court
of New York, 1988). Retrieved on Jan 13, 2015, from; http://www.leagle.com/decision/1988470141AD2d329_4418
Miller, R., and Jentz, G. (2008). Fundamentals of Business Law Part I. Boston, MA: Cengage.
Pacific Gas & Electric Co. v. Bear Sterns & Co. (1990). www.leagle.com. Retrieved on Jan 13,
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