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Law of Contracts: Case Analysis and Legal Implications
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Added on 2019-09-21
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This article provides a detailed analysis of various cases related to the law of contracts and their legal implications. It covers topics such as breach of contract, offer and acceptance, option contracts, misrepresentation, and remedies available to the parties.
Law of Contracts: Case Analysis and Legal Implications
Added on 2019-09-21
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LAW OF CONTRACTSQuestion 1: In the above case, Jordan terminates the contract due to several contractual disputes arising betweenhim and the company CCC. Among the contentions taken by him he can approach the court for theinconsistency in the oral and written contract regarding bonus and other provisions as mentionedunder clause (1), (2) and (4). As regards the bonus promised to Jordan, it was agreed on April 8th thathe would be entitled to 20% work bonus for new business and 10% for existing clients. The sameformed a contractual relationship with the company accepting the same. The inconsistency in theterms of oral and written contract is a matter of dispute, which he can approach the court for apossible redressal. [ CITATION Rob98 \l 1033 ]Similarly, the company by accepting to grant him thefringe benefit of providing him with the company car has entered into a contractual obligation. By nothonoring the terms of contract as agreed upon by the parties on April 3rd, the company has committedbreach of contract. As regards question no. 2 whether Jordan is entitled to the raise in his salary over the telephonicconversation, there has been a clear case of offer and acceptance. While the contract law stipulatesthat the communication of acceptance has to be made, it has to be made by a proper channel.[ CITATION Mic12 \l 1033 ] The offer made by Jordan was clearly acknowledged by CCC, which givesit enough grounds to prove that there has been contractual obligation between the parties. The answer to question 3 concerns the issue no. 6 concerning the covenant not to compete; I wouldstate that the same is not enforceable as the termination of contract took place before the expiry of thecontract period, for the breach of contractual obligations on the part of CCC. Where the employer is atfault for non-compliance of contractual obligations, the covenant cannot be made applicable toemployees. Although in this case, Jordan quit voluntarily, it has to be noted that the company has notbeen able to abide by its contractual obligations mentioned by it at the time of entering into thecontract. Jordan having terminated the contract well before the stipulated time will not violate thenon-compete covenant. The burden of proof is on the Jordan here to prove that if the same is madeapplicable, it will result in extreme hardship and affect his livelihood to him. Question No. 2 In the above case concerning the coverage of the employer’s under the Fair Labor Standards Act,[ CITATION Dic12 \l 1033 ] the rules passed by the Federal and the State Government is applicable forall employees, unless otherwise mentioned. While the rules covers all the employees working in theenterprise, the same are not applicable for employees working in the executive, managerial andsupervisory capacity. The regulations also stipulate rules and methods to assess and calculate as towho are governed by the regulations. In doing so, there are a number of parameters which have beenadopted to calculate the regular hourly wage and the number of hours put in by the employee in thecalendar week.However, the Federal regulations are not made applicable to those employees who have notcompleted one year of service. The same is arbitrary and violates the principles of equity and the FairLabor Standards. Therefore, my contention is that the regulations under clause (c) are invalid andtherefore not maintainable in law and facts. While the Fair Labor Standards Act covers diverse rangeof workers and employees, who are in an employment relationship under employment coverage, it issilent on the minimum term of employment to be completed by employees to be eligible for overtimepay. [ CITATION SRo10 \l 1033 ]The Act is made applicable to all employees, whether contractual,permanent, or temporary except personnel falling under category of ‘Exempt’ employees.[ CITATIONVic131 \l 1033 ] In other words, the act does not state any rule stipulating the time limit to qualify forovertime pay. Therefore, the Department of labor has erred in fixing a ceiling of one year for
employees to be entitled for overtime pay. While each state, ensures that labor laws are ‘welfarelaws’, this principle is opposed to the basis of welfare legislations and fair labor standards. In response to Question 2, the question arises whether the state laws have an overriding effect over thefederal laws or otherwise. The employer is of the argument that the state government has passed aregulation necessitating the companies to pay an overtime pay of 200 percent of the regular hourlywages, while the federal laws has stipulated a rate of 150 percent of an employee’s regular hourlywork. In answer to the claim made by the employer, in situations where the federal, state and local laws arein conflict over certain terms and conditions, the regulations that are more favorable towards theemployees apply to enterprises. The United States Department of Labor rules makes it clear that incases where “the employee is subject to both the state and federal overtime laws, the employee isentitled to overtime according to the higher standard” i.e., the standard providing the higher overtimepay. [ CITATION USD16 \l 1033 ]The employer has to therefore comply with the provision that is mostfavorable to the employees, thereby paying 200 percent of the regular hourly wages. In this regard, it is important to take into consideration whether the state has any special laws whichestablish different wage and hour rules to certain employees or industries. It is important to establishwhether there are exemptions as to the specific type of business or work which necessarily requireslong hours of work. Question No. 3In this case Donna Jones, an employee of Boston Consulting Group received a mail dated January 10,2014 from Michelle Green for employment prospects in Asia. With respect to Question No.1, an offerwas made with a promise that she would be made the VP within 2 years. This communicationamounts to offer as Michelle communicated her intent that would bind both the parties into a contractif the same was accepted by Donna. As regards Question No. 2, it can be implied that the Michelle had responded to Donna stating thatshe would keep the current position open till the end of the month, for an answer. Hence this amountsto option contract as the contract is made between the two of them to keep the offer open till the endof the month. Secondly, this offer is also purported by the consideration that Donna would receive asubstantial raise, if she would take up the offer.Question No. 3 pertains to the meeting held between the two on January 20th where Donna made ancounter offer to Michelle that she would be keen on considering the position if she could stay for onlytwo years instead of the earlier offer of five years proposed by Michelle. While in normalcircumstances, counter offer results in repudiation of the earlier offer, in an option contract such asthis, a counter offer made during the option period does not terminate the power of acceptance by theofferee. This is because the offeree has a contractual right to have the offer which is held open to himtill the end of the month. In answer to Question 4, the best argument that Donna did not accept the offer by her voice mail onJanuary 21st was because Michelle was not in her office on the day the voice mail arrived. Hence, shewas not aware of the same. The rule pertaining to contracts states that the communication regardingacceptance has to be communicated to the offerror. [ CITATION Pre16 \l 1033 ]Since on this day,Michelle was not present at her office, the communication of acceptance was not conveyed to her. Question No. 5 relates to the question as to the argument that can be made by Donna, that the offercould not be revoked prior to her voice mail on 21st. The reason being, in an option contract wasformed and the offer could not be revoked before the end of January. In cases of option contracts suchas this, the offeror has promised to keep the job open for a certain period of time, with aconsideration;[ CITATION Mic90 \l 1033 ] albeit, a promise that if she would accept the offer, she
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