Store OSO has ordered 100 units of R-414 model computers from Company C. However, there was a mistake in the order made by a new staff member at Store OSO. The store intended to order 100 units of the computer and the ordered quantity is far in excess of the annual sales of the company. The store realized its mistake when the delivery trucks were arrived at its warehouse. Store OSO tried to cancel the order, however it Company C declined to accept the return of extra machines.
A contract can be avoided on the basis of following possible grounds:
• Lack of contractual capacity
In this case, there was a clerical mistake made in the order form by a new staff member. It constitutes a unilateral mistake from the perspective of Store OSO. Furthermore, there is high chance that Company C knows the mistake in the order given by Store OSO, because Store OSO is a small store having annual sales of computers far less than 100 units. Even though, Company C has not cross checked the actual quantity and delivered the order. Therefore, this would be considered as a unilateral mistake and hence the contract becomes void. Thus, the contract would not be enforceable.
Additional facts that Store OSO can present to avoid the contract for the additional machine is that it is a single-store office equipment and supply retailer. Thus, it won't be possible for them to store 100 computers at their warehouse.
Refer to the case Blubaugh v Turner (842 P2d 1072).
1) Blubaugh (plaintiff) was an employee of company Schlumberger where Turner was an executive (defendants)
2) Blubaugh was given a contract to resign and release company and employees from wrongful discharge in return for a bonus upon his severance pay and job-relocation counseling. Blubaugh signed the contract and resigned and was given the stated items in contract.
3) Later on, Blubaugh sued for wrongful discharge and unenforceability of the contract due to signing under economic duress.
4) Trial court granted summary judgment in favor of Turner. Blubaugh appealed
The Wyoming Supreme court affirmed the decision.
Blubaugh claimed duress for lack of negotiating power, lost of bonus pay and counseling, being fired if he didn't sign, and his emotional state at the time. The court applied the test for economic duress "1) a party involuntarily accepts the terms of another, (2) circumstances permit no other alternative, and (3) such circumstances are the result of coercive acts of the other party." The court assumed for the sake of argument points 1 and 2 and looked at whether Turner's acts were coercive. It found no evidence of such, Blubaugh's claim of shock and not being informed to a right of attorney is not enough to satisfy the coercive act requirement. Hence, there is no claim for economic duress.
Person H a minor can disaffirm the purchase of a non-necessity good, a motorcycle, regardless of whether she lied about her age. The fact that she was 17 (under age of majority) holds. However, most states have statutes that protect sellers from having to refund the whole amount. For example, if a minor return damaged goods the seller may only have to refund the amount it is worth. In fact, lying about her age may make H liable for fraud. Depending on the state law, H may be better off just keeping the damaged bike.