When two parties have an agreement with each other and both agree to accept the terms, those parties form a contract. Many different types of contracts exist including written, oral, or implied. These contracts will allow both parties to see exactly what they are agreeing to and to help make any changes that may be necessary. A contract can be made void if that contract is made under duress, if any misrepresentation or fraud exists, or if there are mistakes made in the contract. Learning Team A will review several scenarios that involve contracts to determine the outcome of each as well as the legal ramifications.
Foodmart contracted with Masterpiece Construction to renovate ...view middle of the document...
Masterpiece can later sue Build Construction if they chose.
Jeremy Atwater is a 17-year-old, working part-time for Foodmart. Jeremy purchased a car from Smooth Sales Used Cars. The salesman thought Jeremy was old enough to sign the contract and accepted Jeremy’s down payment and agreement to pay $200 per month. Six months later, Jeremy lost his job and could no longer make the payments. Jeremy returned the car to Smooth Sales, explained the situation, and asked for a refund. Because the salesman thought Jeremy was old enough to sign the contract, he will likely point out provisions of the contract and insist on payment. However, Jeremy was a minor when he signed the contract, and did not have the capacity to contract. He has the legal right under the infancy doctrine to disaffirm the contract. The company is also obligated to return Jeremy’s down payment and any additional money he paid each month. By law, when a minor chooses to disaffirm a contract, the adult must place the minor in status quo; the position the minor was in before entering the contract (Cheeseman, 2010). This is the only legal remedy to the situation. Equitably, the company could offer Jeremy a job, which would give him the ability to pay for the car however if Jeremy still chooses to disaffirm the contract, he has the legal right to do so. The salesman should have verified Jeremy’s age rather than making an assumption and required an adult cosigner to validate the contract.
Brian McDonald, a produce manage at Foodmart, Inc, grocery store, spends most of his time outside of work with his model trains. Brian’s train set was large, which consisted of rare and one-of-a kind trains. He mentioned to one of his fellow train hobbyist Harry that in two years he would be retiring from Foodmart, and will be selling his trains to spend his remaining life traveling on trains. Brian also stated to Harry that he would only plan to offer his trains to Harry because he knew Harry would take care of the trains as his own. With that statement Harry took that as entering a contract and was looking forward to buying the trains from Brian in the next two years. After their conversation, Harry made renovations to his home to make room for Brian’s trains, and he also borrowed money from his aunt to buy the trains. Harry did mention the renovations for the trains to Brian and Brian responded with a smile. When the day came to sell the trains, Brian sold the trains to a neighbor, and Harry believed Brian had breached their contract. Harry sued Brian for breach contract or promissory estoppel. Brian would likely win. The oral statement from Brian to sell his trains to Harry was not supported by consideration; something of legal value, given in exchange...