Business Law Case Study

Topics: Contract, Contract law, Bicycle handlebar Pages: 5 (2067 words) Published: October 17, 2011
Business Law
Case Study

In the case presented, Biff Smith, the Chief of Police of the local department ordered a set of bicycles off of a local storeowner, Dirk Right. This was no simple order though, in fact Biff intended on starting a bike patrol unit within the local department. Biff went to Dirks Bicycle shop to place an order. The order was for five mountain bikes to be used for patrol so they had to be custom made in order to sport the police decals. Biff was very familiar with the Schwinn bicycle company so he asked Dirk to order him five “top of the line” bikes at the “best price”. This simple statement implied that Biff not only wanted the bikes but he intended on paying for them as well. So soon after Dirk accepted the deal by saying, “you got it Biff”, there for creating an offer and acceptance situation. Biff would be considered the offeror because he was quoted to say, “Get me 5 top of the line Schwinn bikes, get me the best price you can” and Dirk was the offeree who accepted this offer by saying, “you got it Biff”.

At this point there is only a simple interaction between the two parties, Dirk and Biff, there was never a written contract drawn up to be signed or documented so when the conflict arises there are many grey areas to be touched upon. The only document there is to work with is the letter from the PBA that Biff signed and noted, thanking dirk for the order of the bikes. Price was never a factor brought into consideration but came to be the most important part of the entire case. After Dirk placed the order for the special bikes at Biffs request, the grand total came out to be $17,500. These “top of the line” bike cost $3,500 per bike due to the custom police decals and accessories needed in order to fulfill Biffs order. As Biff previously asked for the best price, Dirk did just that. Dirk was only charging Biff for the cost of the bike because he wanted to do something good for his community; he wasn’t trying to make any profit off of this deal just an act of good faith. The custom police mountain bikes were delivered to Biff in a timely fashion and the final price was made aware to Biff. As stated from Biff, he claimed it to be “highway robbery”; obviously the price tag of $3,500 per bike seemed to be a little high in Biffs mind so he decided to cancel the order. The trouble is that they were specially ordered items and could not be returned or exchanged; as a result, Dirk obviously didn’t pick them back up and was left with the only option of suing the P.D. for his losses due to a breach of contract. The only way Dirk has a chance of coming out on top strictly depends on if there was a contract established or not. In order to speculate whether a contract was formed all elements of a contract would have to be taken into consideration. The elements of a contract include: offer, acceptance, consideration, capacity and legality. First there has to be an offer made to and accepting offeree, which in this case as stated above is Biff and Dirk. Biff would be considered the offerer because of his request for the custom Schwinn mountain bikes and Dirk would be the offeree because of his clear, “You got it” acceptance to order them. Once the offer is made, it is either accepted or not accepted, in this case there was acceptance by the offeree which formed a clear contract. After the offer is made and accepted by Dirk then consideration must be present. Consideration is the promise or performance that the promisor demands as the price of the promise. It is what each party to a contract gives up to the other in making the agreement. Now the question is, was there consideration? Yes, there was consideration, Dirk decided to sell the custom police bikes to Biff at his cost as a way of contributing them to the community. Biff was to simply pay Dirk the cost of the custom police bikes in return for ordering them. However, there was no set stated price when the oral agreement was made. This mutual...
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