Tomara Bowleg, LaToya Oeur, Tracey Holyoak
June 27, 2011
Both the business environment and the private sector use contracts as a means for agreement regarding transactions. For any contract to be legally binding four requirements must be met: 1) agreement, 2) consideration, 3) contractual capacity, and 4) lawful object (Cheeseman, 2010, p. 162). After the four requirements are met, it is the responsibility of each party involved to complete their respective obligations. Unfortunately, not all contracts will see completion. Events that arise in the course of the completion of the contract can cause breaches. Other times, one party in the contract fails in his or her obligation because of negligence. When contractual obligations cannot be fulfilled the injured party has certain rights to recover damages or force performance. In this paper the subject to address are situations that have arisen in various contractual scenarios. Based upon the contents of the contracts and causes of the contractual breaches, each scenario will address possible defenses and determine which party will win the suit along with potential remedies. Scenario One
The first scenario deals with a contract between two organizations. In the course of business, Foodmart, a retail grocery store, needed to renovate its Main Street location. A contract was formed with the independent contractor, Masterpiece Construction, for this job. As the job was in process, Masterpiece chose to subcontract the remaining work to Build Them to Fall Construction. The information regarding the subcontracting of this job was not given to Foodmart. When Foodmart became aware of the situation, it petitioned the court to request an injunction. A suit against Masterpiece for breach of contract and specific performance also ensued. Upon review of the contract the court approve the injunction, prohibiting Masterpiece from subcontracting the job. The court concluded that unless the original contract between Foodmart and Masterpiece contained the provision that Masterpiece could act as agent and contrive contracts with third parties, Masterpiece needed the authority to subcontract the job. This contractual provision did not exist therefore causing a breach of contract. Foodmart will not win the requested remedy for specific performance, as forced completion of work is a violation of the 13th Amendment of the Constitution.
In defense, Masterpiece claimed it had the right to delegate the job because of commercial impracticability. This defense is not sufficient. “Commercial impracticability is a contractual defense that may excuse a duty under the contract if that duty becomes impracticable to perform due to forces neither party could control or contemplate” (eHow.com, 2011, para. 1). The events causing an overburden on Masterpiece was caused by its own behavior of over booking jobs via an increase in new contracts. This was an avoidable event; the burden is not that of the plaintiff, Foodmart. Masterpiece had neither the right to delegate the job nor to discharge the contract due to commercial impracticability. Scenario Two
In the second scenario, a vehicle purchase contract was agreed to between Smooth Sales Used Cars and Jeremy Atwater. Unknown to Smooth Sales, Jeremy is only 17 and therefore considered a minor. After several months of ownership, Jeremy is no longer able to make the monthly payments outlined in the contract and has decided to return the vehicle and cancel the contract. In this situation, the legality of the initial contract is at issue. Because Jeremy is a minor, the contract does not meet all four requirements, specifically that one party did not have contractual capacity. This factor provides that the contract can be voidable by Jeremy according to the infancy doctrine, which allows “minors to disaffirm (cancel) most contracts they have entered into with adults” (Cheeseman, 2010, p. 168). Jeremy has the...