Description
General Instructions for Activities
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Read/watch all assigned materials listed for the week in the Course Content
Cite to assigned materials in all responses
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Use only assigned materials to complete; do not use the internet unless otherwise
instructed
Include in-text citations and a Reference List for in-text citations
Write in correct, complete sentences, in paragraph format unless otherwise instructed
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Tips for Formatting and Structuring Analysis:
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Write in complete sentences in paragraph format.
Use in-text citations citing to relevant assignment materials.
Double-space; 12-point Arial or Times Roman font.
Introductory Sentence: Begin with an introductory sentence or very brief paragraph
that states your conclusion to the questions asked.
Concluding Sentence: End the discussion with a concluding sentence or a very
brief paragraph that summarizes your conclusion/what you discussed.
Support Arguments and Positions: Please refer to the module in Content, “How to
Support Arguments and Positions”.
Use the American Psychological Association (APA) citation format for all citations.
General Background: The Viral Clean (“Clean”) owners have questions and need
clarification about several contract concepts and issues related to their new
business. Specifically, they have questions about:
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the Statute of Frauds “writing requirement” and
electronic contracts
Clean will be selling products via the internet, and the owners wonder whether these
electronic contracts are valid and enforceable. TLG discusses the following case with
the owners to explain the Statute of Frauds.
Background Facts You Need To Know: Company X, a company in Illinois,
contracted via the internet with Windows Bright, a small window washing business in
Missouri, to purchase four cases of Shiny Lite window cleaning solution at $200 per
case. Company X paid via the internet with a company credit card, and an electronic
contract was created. The electronic contract stated that the four cases of Shiny Lite
would be shipped to Company X’s place of business in Illinois via UPS. Once UPS
delivered the Shiny Lite, the contract required Windows Bright to clean Company X’s
windows.
Instructions:
Winne and Ralph have concerns about the Statute of Frauds and electronic
contracts. To respond to their concerns, you must address the following questions:
A. Discuss whether the contract between Company X and Windows Bright is
subject to the requirements of the Uniform Commercial Code Statute of Frauds.
B. Analyze and explain whether the electronic internet contract between
Company X and Windows Bright satisfies the “writing” requirements for the
Statute of Frauds? If so, how and why?
Number each section as:
A.
B.
Week 5 material that can be used for reference
https://www.law.cornell.edu/wex/statute_of_frauds
https://www.law.cornell.edu/wex/parol_evidence_rule
https://www.britannica.com/topic/performance-contract-law
https://www.law.cornell.edu/wex/substantial_performance
https://www.law.cornell.edu/wex/anticipatory_breach
https://definitions.uslegal.com/d/discharge-of-a-contract/
https://www.legalmatch.com/law-library/article/ultimate-guide-to-remedies-for-breach-ofcontract.html
https://saylordotorg.github.io/text_law-for-entrepreneurs/s16-form-and-meaning.html
https://saylordotorg.github.io/text_law-for-entrepreneurs/s18-01-discharge-of-contract-duties.html
https://saylordotorg.github.io/text_law-for-entrepreneurs/s19-03-legal-remedies-damages.html
https://www.law.cornell.edu/ucc/2/2-201
https://www.nolo.com/legal-encyclopedia/electronic-signatures-online-contracts-29495.html
And extra information for material breach
Material Breach:
In contract law, a “material” breach of contract is a breach (a failure to perform
the contract) that strikes so deeply at the heart of the contract that it renders
the agreement “irreparably broken” and defeats the purpose of making the
contract in the first place. The breach must go to the very root of the
agreement between the parties. If there is a material breach (sometimes
referred to as a “total” breach), the other party can simply end the agreement
and go to court to try to collect damages caused by the breach.
In deciding whether a breach is material, courts often look to guidance from a
legal guide known as the Restatement (Second) of Contracts, as well as to
other court decisions that arose from contract disputes. Generally, the factors
discussed below are relevant to determining whether a breach of contract was
a material breach.
Is The Other Party Deprived of “The Heart” of What It Bargained for?
For example, if the BMW dealer promised you a radio and fancy hubcaps, but
the car that was delivered lacked both, that would probably not deprive you of
the true purpose of your deal–the car–and would be less likely to be a
material breach. You wouldn’t be able to end the contract (though you could
demand the dealer remedy the situation in some way). On the other hand, if a
used-car dealer promised you the actual Ford Mustang driven by Steve
McQueen in the movie, ?Bullitt?, then presented you with a different Mustang,
that would be a material breach. In this instance, your bargain wasn’t about
the make and model of the car; it was about one particular vehicle driven in
the movie.
Can the Other Party Be Compensated for The Loss?
Will money solve the problem and, if so, how much? If it’s something that can
be fixed with reasonable effort or expense, while keeping the contract in
effect, it’s less likely to be material. Consider the hubcap-free, radio-less
BMW, mentioned above. Because the dealer could easily fix the problem by
installing the promised features, this probably isn’t a material breach of the
contract, and you wouldn’t be able to cancel the contract.
What Will the Breaching Party Lose (or Forfeit)?
How much has the breaching party already done to fulfill its end of the deal?
This factor often hinges on timing: how far along the parties are in carrying out
their contractual obligations when the breach of contract occurs. Consider a
homeowner who hires a contractor to create a custom kitchen. If the
homeowner declares a breach of contract when the kitchen is near
completion, the contractor will lose much more in time and money than if the
breach of contract was declared before construction began. If most of the
contractual obligations have been completed, you will be less likely to be able
to say that a breach of contract is material and thus be able to cancel the
contract.
What Are the Chances That the Breaching Party Will Fix Things?
The more likely it is that the breaching party can and will fix the problem, the
less likely the breach of contract is material. If the other party shows that
problems are likely to be solved; for instance, it provides security for its
promised payment, or some other reasonable assurance that it will honor the
deal, or if the economy or market shifts in favor of performance, then the
breach of contract is less likely to be material. On the other hand, signs of
financial weakness or defaults on payments show that the problems are less
likely to be corrected (and make it more likely that you could rely on a material
breach of contract to cancel the contract).
Did the Breaching Party Act in Bad Faith?
If the breach of contract was willful or resulted from bad faith or unfair dealing
and the case is brought to court, the court is more likely to presume a material
breach of contract. For example, one court found that an executive who was
insubordinate and refused to follow directions had materially breached his
employment agreement. On the other hand, a breach that results from simple
carelessness (“negligence”) or circumstances beyond the party’s control is
less likely to be considered a material breach of contract.
Is the Non-Breaching Party “Ready, Willing, and Able” to Perform?
It’s not enough to simply claim that the other party committed a material
breach of contract. The non-breaching party must also be “ready, willing, and
able” to perform its obligations under the contract, if it hasn’t performed them
already. In one case, for example, a New York man contracted to buy a
vacation house “as is” for $610,000. When the sellers refused to go through
with the deal, the buyer claimed breach of contract and sued. The buyer lost
because he could not show he was “ready, willing and able” to perform the
contract, because he wanted substantial improvements to the heating and
plumbing systems. In other words, he was not willing to take the house “as is.”
What Does the Contract Say?
Some contracts provide guidance as to what constitutes a material breach of
contract. Rather than rely on a judge’s discretion or interpretation of the law
should a dispute arise, the parties can include a clause in the contract stating
that a breach of certain provisions of the contract will be considered material
breaches. For example, a clause may state that certain activities — a failure to
make payments, a failure to maintain insurance, or a failure to achieve certain
sales goals — will be considered material breaches of the contract. Because
delays in performance and payment are not always considered material
breaches, some contracts add a statement to the contract that “time is of the
essence,” which means that these types of delays will be considered material
breaches of the contract.
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