MEMORANDUM 03.01.2010 TO: FROM: RE: Daphne Matthews Alex Associate - 4667 Memo Assignment 1: Who Does the Pastry?
Introduction Collins was hired as Head Chef at the Marrimount Hotel and believed that this job came with the inherent authority to choose his assistant chefs, even though nothing of this was mentioned in the contract for employment. Therefore, when Crest, owner of the Marrimount, attempted to determine Collins's assistants, Collins quit his job and went to work for the Treadwell Center. The contract It may actually be good for Collins to argue that there was no contract between himself and Crest. First, there was no detailed employment agreement, just a letter signifying the contract terms. The letter referred to itself as a contract lasting for “five years from the signature thereof.” However, presumably it was never signed and therefore never consummated. Secondly, Collins could argue that this is an agreement in violation of the statute of frauds, since it requires more than one year to perform and was not signed. Therefore, if Collins argues that he never signed nor agreed to the contract terms, perhaps he can avoid, altogether, the issues of breach of fiduciary duty and the injunction against working for a competitor. However, it seems evident that both Collins and Crest considered the agreement to be a binding employment contract. This is not merely an oral agreement to be finalized at a later date, as was the case in Tropicana Hotel Corporation v. Speer. Collins demonstrated an immediate intent to be bound by the agreement by moving to New York from Atlanta and performing for a year under the contract. Therefore, since it is likely that the court will find a five-year contract existed and the contract was breached, the question becomes who is liable for the breach? III. Who breached first? The facts are undisputed that Collins left the kitchen upon the hiring of an unacceptable pastry chef. This would likely constitute a breach of Collins’s employment contract absent any other considerations. However, as the Kansas court states: “A party is not liable for a material failure of performance if it can show that the other party committed a prior material breach of the contract; in such event, the prior breach discharged the first party's own duty to perform.” Therefore, if it can be shown that Marrimount breached its contract by preventing Collins from choosing his own assistant chefs, Collins can avoid Crest’s allegations of breach of fiduciary duty and the injunction against working for a competitor since Crest breached the contract first. II.
a. Argument that Crest breached first i. Define “head chef” to determine duties The Supreme Court of Virginia stated in Neely v. White, “Before partial failure of performance of one party will excuse the other from performing his contract or give him a right of rescission, the act failed to be performed must go to the root of the contract.” Therefore, Collins must show that the overruling of his choice for pastry chef and the hiring of an unacceptable assistant chef constitutes a material breach of contract. The chief dispute is over what duties are included in a position of Head Chef. The written agreement merely states that Collins will “assume the duties of head chef,” without stating what those duties are. It might be helpful to point out that the general rule with ambiguities in a contract is that the contract will be construed against the drafter, in this case, Crest. Additionally, it is helpful that Collins states in his deposition that it is “industry standard” for a head chef to select his own assistants, much like a basketball coach selects the starting lineup, not the athletic director who hired him. Typically, “when evidence of custom and usage of the trade is used to interpret a contract and the issue is disputed, summary judgment is inappropriate…” (Nadherny v. Roseland Property Company, Inc.). It is also helpful to our case that Mrs. Stein...
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