Quiz 10: Criminal Law and Cyber Crime

Business

Express versus Implied Contracts Everett McCleskey, a local businessperson, is a good friend of Al Miller, the owner of a local candy store. Every day on his lunch hour, McCleskey goes into Miller's candy store and stays about five minutes. After looking at the candy and talking with Miller, McCleskey usually buys one or two candy bars. One afternoon, McCleskey goes into Miller's candy shop, looks at the candy, and picks up a $1 candy bar. Seeing that Miller is very busy, he waves the candy bar at Miller without saying a word and walks out. Is there a contract? If so, classify it within the categories presented in this chapter.

Free

Essay

Occurrence of Contracts and Classification of its Categories For the formation of the valid contract, following are the requirements that need to be fulfilled: a. Agreement: There must be the offer by one party to form a contract and to that offer there must be an acceptance by other party. b. Consideration: Any promise made by the party to perform the contract must have to pay some valid consideration. c. Capacity: Both parties must have the capacity to enter into the contract. d. Legality: The goal which has to be accomplished through must be legal. In this case, there is a contract between M and McC as there is an offer by McC by waving the candy and the candy costs $1, which he usually pays. Thus it means that both parties are competent to the contract and it is legal. The contract they formed is an implied contract. Implied contract is formed through the conduct of the parties. It has three essential criterions to fulfill. Firstly, there must be services provided by one party, that party has expected that compensation for that services must be paid and other party did not reject those services. Similarly, in this case, McC has taken services from M and M was expected to receive money for the candy and McC did not reject the services. Thus it is forming an implied contract in this case.

Q 2

Mitsui Bank hired Ross Duncan as a branch manager in one of its Southern California locations. At that time, Duncan received an employee handbook informing him that Mitsui would review his performance and salary level annually. In 2008, Mitsui decided to create a new lending program to help financially troubled businesses stay afloat. Duncan was appointed to be the credit development officer (CDO) for the new program and was given a written compensation plan. According to the plan, his compensation would be based on the program's success and would include bonuses and commissions based on the volume of loans and sales. The written plan also stated, "This compensation plan will be reviewed and potentially amended after one year and will be subject to such review and amendment annually thereafter." Duncan's efforts as CDO were successful, and the business-lending program he developed grew to represent 25 percent of Mitsui's business in 2009 and 40 percent in 2010. Nevertheless, Mitsui refused to give Duncan a raise in 2009. In fact, Mitsui amended his compensation plan to reduce his compensation significantly and to change his performance evaluation schedule to every six months. When he had still not received a raise by 2011, Duncan resigned as CDO and fi led a lawsuit alleging breach of contract. Using the information presented in the chapter, answer the following questions. What are the four requirements of a valid contract? DEBATE THIS: Companies should be able to make or break employment contracts whenever and however they wish.

Free

Essay

An enforceable contract is a contract which is valid by the court. Any contract which is either made verbally or written must include specific element in order to make it legally enforceable in a court. If any of the elements is missing from the contract, then it will not be enforceable. A valid contract has four requirements. They must consist of offer, acceptance, consideration and intention of legal consequences. These are explained as below: • Offer • It is an act to do something or to pay an amount, if accepted, forms a valid contract. • To make an offer, there should be at least two parties or even more who can legally enter into a contract. • It is important to specify the deadline for the acceptance of offer in order to avoid potential dispute between the parties or cancellation. • An offer cannot take silence as a form of acceptance from the other party. • Acceptance • After the offer is made, there should be acceptance from the other party or parties to make it a valid contract. • The party accept the offer if they are clear with the rules and regulation. • If the parties are still under the negotiation process and there is no acceptance till now to the offer, then it is still not a contract. • If a person to whom the offer is made has accepted only some of the terms or proposes some of the new terms, then it is the counter-offer that is made by the other party and is still not a valid contract. • Consideration • This forms the important part of the contract which consist of value such as money, payment or the cost of the promises of performance agreed to in a contract. • A valid contract will have consideration part for both the parties, where one party promises to do something in return for a promise from the other party to provide some benefit. • Intention of legal consequences • A contract is valid, if the parties agree to enter into a contract legally and are aware that the agreement can be enforced by law. • Sometimes the document may contain the words "subject to contract" or "without prejudice" which indicates that the things that are written are legal in nature. Hence, these are some of the requirements of a valid contract.

Q 3

QUESTION WITH SAMPLE ANSWER: Implied Contract. Janine was hospitalized with severe abdominal pain and placed in an intensive care unit. Her doctor told the hospital personnel to order around-the-clock nursing care for Janine. At the hospital's request, a nursing services firm, Nursing Services Unlimited, provided two weeks of in-hospital care and, after Janine was sent home, an additional two weeks of at-home care. During the at-home period of care, Janine was fully aware that she was receiving the benefit of the nursing services. Nursing Services later billed Janine $4,000 for the nursing care, but Janine refused to pay on the ground that she had never contracted for the services, either orally or in writing. In view of the fact that no express contract was ever formed, can Nursing Services recover the $4,000 from Janine? If so, under what legal theory? Discuss.

Free

Essay

The contract between J and the nursing service is what is called a "quasi-contract." A quasi-contract is a type of fictional contract to prevent individuals from unjustly receiving a benefit without consideration for it. This quasi-contract would allow the nursing service to recover from J for the emergency services because the nursing service rendered them with the intent to be paid and did not act officiously. Because J was aware of the in-home services and allowed the treatment without rejecting the offer, her conduct implies acceptance of the offer for help. Thus, a contract for the in-home services was formed through conduct and J will have to pay the nursing service.

Q 4

Mitsui Bank hired Ross Duncan as a branch manager in one of its Southern California locations. At that time, Duncan received an employee handbook informing him that Mitsui would review his performance and salary level annually. In 2008, Mitsui decided to create a new lending program to help financially troubled businesses stay afloat. Duncan was appointed to be the credit development officer (CDO) for the new program and was given a written compensation plan. According to the plan, his compensation would be based on the program's success and would include bonuses and commissions based on the volume of loans and sales. The written plan also stated, "This compensation plan will be reviewed and potentially amended after one year and will be subject to such review and amendment annually thereafter." Duncan's efforts as CDO were successful, and the business-lending program he developed grew to represent 25 percent of Mitsui's business in 2009 and 40 percent in 2010. Nevertheless, Mitsui refused to give Duncan a raise in 2009. In fact, Mitsui amended his compensation plan to reduce his compensation significantly and to change his performance evaluation schedule to every six months. When he had still not received a raise by 2011, Duncan resigned as CDO and fi led a lawsuit alleging breach of contract. Using the information presented in the chapter, answer the following questions. Did Duncan have a valid contract with Mitsui for employment as CDO? If so, was it a bilateral or a unilateral contract? DEBATE THIS: Companies should be able to make or break employment contracts whenever and however they wish.

Essay

Q 5

Types of Contracts Burger Baby restaurants engaged Air Advertising to fly an advertisement above the Connecticut beaches. The advertisement offered $1,000 to any person who could swim from the Connecticut beaches to Long Island in less than a day. At 10:00 a.m. on October 10, Air Advertising's pilot flew a sign above the Connecticut beaches that read: "Swim across the Sound and Burger Baby pays $1,000." On seeing the sign, Davison dived in. About four hours later, when he was about halfway across the Sound, Air Advertising flew another sign over the Sound that read: "Burger Baby revokes." Davison completed the swim in another six hours. Is there a contract between Davison and Burger Baby? Can Davison recover anything?

Essay

Q 6

Mitsui Bank hired Ross Duncan as a branch manager in one of its Southern California locations. At that time, Duncan received an employee handbook informing him that Mitsui would review his performance and salary level annually. In 2008, Mitsui decided to create a new lending program to help financially troubled businesses stay afloat. Duncan was appointed to be the credit development officer (CDO) for the new program and was given a written compensation plan. According to the plan, his compensation would be based on the program's success and would include bonuses and commissions based on the volume of loans and sales. The written plan also stated, "This compensation plan will be reviewed and potentially amended after one year and will be subject to such review and amendment annually thereafter." Duncan's efforts as CDO were successful, and the business-lending program he developed grew to represent 25 percent of Mitsui's business in 2009 and 40 percent in 2010. Nevertheless, Mitsui refused to give Duncan a raise in 2009. In fact, Mitsui amended his compensation plan to reduce his compensation significantly and to change his performance evaluation schedule to every six months. When he had still not received a raise by 2011, Duncan resigned as CDO and fi led a lawsuit alleging breach of contract. Using the information presented in the chapter, answer the following questions. What are the requirements of an implied contract? DEBATE THIS: Companies should be able to make or break employment contracts whenever and however they wish.

Essay

Q 7

Interpretation of Contracts East Mill Associates (EMA) was developing residential "units" in East Brunswick, New Jersey, within the service area of the East Brunswick Sewerage Authority (EBSA). The sewer system required an upgrade to the Ryder's Lane Pumping Station to accommodate the new units. EMA agreed to pay "fifty-five percent (55%) of the total cost" of the upgrade. At the time, the estimated cost to EMA was $150,000 to $200,000. Impediments to the project arose, however, substantially increasing the cost. Among other things, the pumping station had to be moved to accommodate a widened road nearby. The upgrade was delayed for almost three years. When it was completed, EBSA asked EMA for $340,022.12, which represented 55 percent of the total cost. EMA did not pay. EBSA filed a suit in a New Jersey state court against EMA for breach of contract. What rule should the court apply to interpret the parties' contract? How should that rule be applied? Why? [ East Brunswick Sewerage Authority v. East Mill Associates , Inc., 365 N.J.Super. 120, 838 A.2d 494 (A.D. 2004)]

Essay

Q 8

Mitsui Bank hired Ross Duncan as a branch manager in one of its Southern California locations. At that time, Duncan received an employee handbook informing him that Mitsui would review his performance and salary level annually. In 2008, Mitsui decided to create a new lending program to help financially troubled businesses stay afloat. Duncan was appointed to be the credit development officer (CDO) for the new program and was given a written compensation plan. According to the plan, his compensation would be based on the program's success and would include bonuses and commissions based on the volume of loans and sales. The written plan also stated, "This compensation plan will be reviewed and potentially amended after one year and will be subject to such review and amendment annually thereafter." Duncan's efforts as CDO were successful, and the business-lending program he developed grew to represent 25 percent of Mitsui's business in 2009 and 40 percent in 2010. Nevertheless, Mitsui refused to give Duncan a raise in 2009. In fact, Mitsui amended his compensation plan to reduce his compensation significantly and to change his performance evaluation schedule to every six months. When he had still not received a raise by 2011, Duncan resigned as CDO and fi led a lawsuit alleging breach of contract. Using the information presented in the chapter, answer the following questions. Can Duncan establish an implied contract based on the employment manual or the written compensation plan? Why or why not? DEBATE THIS: Companies should be able to make or break employment contracts whenever and however they wish.

Essay

Q 9

CASE PROBLEM WITH SAMPLE ANSWER: Contract Enforceability. California's Subdivision Map Act (SMA) prohibits the sale of real property until a map of its subdivision is filed with, and approved by, the appropriate state agency. In November 2004, Black Hills Investments, Inc., entered into two contracts with Albertson's, Inc., to buy two parcels of property in a shopping center development. Each contract required that "all governmental approvals relating to any lot split [or] subdivision" be obtained before the sale but permitted Albertson's to waive this condition. Black Hills made a $133,000 deposit on the purchase. A few weeks later, before the sales were complete, Albertson's filed with a local state agency a map that subdivided the shopping center into four parcels, including the two that Black Hills had agreed to buy. In January 2005, Black Hills objected to concessions that Albertson's had made to a buyer of one of the other parcels, told Albertson's that it was terminating its deal, and asked for a return of its deposit. Albertson's refused. Black Hills filed a suit in a California state court against Albertson's, arguing that the contracts were void. Are these contracts valid, voidable, unenforceable, or void? Explain. [ Black Hills Investments, Inc. v. Albertson's, Inc., 146 Cal.App.4th 883, 53 Cal.Rpt.r.3d 263 (4 Dist. 2007)]

Essay

Q 10

Interpretation of Contracts Lisa and Darrell Miller married in 1983 and had two children, Landon and Spencer. The Millers divorced in 2003 and entered into a joint custody implementation plan (JCIP). Under the JCIP, Darrell agreed to "begin setting funds aside for the minor children to attend post-secondary education necessary to pay tuition, books, supplies, and room and board not to exceed four (4) years." After Landon's eighteenth birthday, Darrell filed a petition to reduce the amount of the child support that he was paying to Lisa. In response, she asked the court to order Darrell to pay the boys' college expenses but offered no evidence to support the request.Darrell contended that the JCIP was not clear on this point. Do the rules of contract interpretation, applied to the phrasing of the Millers' JCIP, support Lisa's request or Darrell's contention? Explain. [ Miller v. Miller, 1 So.3d 815 (La.App. 2009)]

Essay

Q 11

Quantum Meruit Robert Gutkowski, a sports marketing expert, met numerous times with George Steinbrenner, the owner of the New York Yankees, and other Yankees executives over a ten-year period to help launch the Yankees Entertainment and Sports Network (YES Network). He was a paid consultant during that time. When the parties quit working together, Gutkowski sued, contending that he had been promised an ownership share in YES as part of the compensation for his work. While he was a paid consultant, he was not given a share of YES or hired as a regular executive. He contended that, by industry standards, a reasonable value for his services would be a 2 to 3 percent ownership share. There was no written contract for such a share, but Gutkowski claimed he was due that to prevent unjust enrichment of the Yankees for exploiting his expertise. Does Gutkowski have a good claim for payment based on quantum meruit? Explain. [ Gutkowski v. Steinbrenner, 680 ESupp.2d 602 (S.D.N.Y. 2010)]

Essay

Q 12

Types of Contracts Kim Panenka asked to borrow $4,750 from her sister, Kris, so that Kim could make her mortgage payment. Kris deposited a check for that amount into Kim's bank account. Hours later, Kim asked to borrow another $1,100. Kris took a cash advance on her credit card and deposited this amount into Kim's account. About a week later, Kim asked Kris for $845.40 to pay a dental bill. Kris paid the bill by credit card. After Kris asked for repayment several times and did not receive payment, she filed a suit against her sister in a Wisconsin state court. At the trial, Kim admitted that she had asked for the funds and that it had not been a gift, but she testified that the sisters had a long history of paying for things for each other without expecting repayment. Kris countered that she had "loaned" Kim these amounts. Can the court impose a contract between the sisters? Explain. [Panenka v. Panenka, 331 Wis.2d 731, 795 N.W.2d 493 (2011)]

Essay

Q 13

A QUESTION OF ETHICS: Unilateral Contracts. International Business Machines Corp. (IBM) hired Niels Jensen in 2000 as a software sales representative. In 2001, IBM presented a new "Software Sales Incentive Plan" (SIP) at a conference for its sales employees. A brochure given to the attendees stated, "There are no caps to your earnings; the more you sell, … the more earnings for you." The brochure outlined how the plan worked and referred the employees to the "Sales incentives" section of IBM's corporate intranet for more details. Jensen was given a "quota letter" that said he would be paid $75,000 as a base salary and, if he attained his quota, an additional $75,000 as incentive pay. In September, Jensen closed a deal with the Internal Revenue Service that was worth more than $24 million to IBM. Relying on the SIP brochure, Jensen estimated his commission to be $2.6 million. IBM paid him less than $500,000, however. Jensen filed a suit in a federal district court, contending that the SIP brochure and quota letter constituted a unilateral offer that became a binding contract when Jensen closed the sale. In view of these facts, consider the following questions. [ Jensen v. International Business Machines Corp., 454 F.3d 382 (4th Cir. 2006)] (a) Would it be fair to the employer in this case to hold that the SIP brochure and the quota letter created a unilateral contract if IBM did not intend to create such a contract? Would it be fair to the employee to hold that no contract was created? Explain. (b) The "Sales Incentives" section of IBM's intranet included a clause providing that "management will decide if an adjustment to the payment is appropriate" when an employee closes a large transaction. Jensen's quota letter stated, "[The SIP] program does not constitute a promise by IBM to make any distributions under it. IBM reserves the right to adjust the program terms or to cancel or otherwise modify the program at any time." How do these statements affect your answers to the above questions? From an ethical perspective, would it be fair to hold that a contract exists despite these statements?

Essay

Related Quizzes

Quiz 10: Criminal Law and Cyber Crime

QuizPlus

Links

Contact Us