Legal Analysis: Bahr v. Technical Consumer Products Case Study

This case study examines Bahr v. Technical Consumer Products, focusing on a breach of contract dispute regarding a bonus plan. The case involves Emily Bahr, a district sales manager for TCP, who was entitled to a bonus based on achieving sales growth. Despite meeting the requirements, TCP paid a reduced bonus, leading Bahr to sue for breach of contract. The central issue was whether the bonus plan was too indefinite. The court ruled in favor of Bahr, holding that the bonus plan was definite, and TCP's modifications were unacceptable without prior communication. The court emphasized the importance of informing employees of any changes to plans that affect them, especially when employees are party to the plan, finding that TCP breached its contractual obligation. The court also found a lack of consideration for Bahr and the bonus plan, as TCP did not communicate changes, thus making the plan invalid. The court's decision underscored the significance of transparency and adherence to contractual obligations in employment agreements.

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Name
College of Affiliation

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FACTS:
Emily Bahr served as a district sales manager for TCP which had a bonus plan whereby a district
sales managers who was able to achieve 100% of sales growth, would receive a bonus of 200%
of his or her salary. Nonetheless, TCP came up with a discrete provision, which denoted that
they had a right to modify the plan1. In the year, Bahr managed to get a sales growth of 113%,
and a gross margin of 42%. This satisfied the provisions of the contract, thus she was entitled to
a bonus of 200% of her salary. The amount of money she was earning was $ 42, 500; thus, she
was anticipating a bonus of $85, 9452. However, the company could not afford such money, and
only paid her $ 34, 229. Bahr sued for a breach of contract.
ISSUE:
The issue that was of concern for this case is whether the bonus plan that TCP had with Emil
Bahr was too indefinite. The responsibility of the court was to determine if TCP was correct.
DECISION:
In the view of the court, the bonus plan was not indefinite; thus, TCP was not correct, and they
were in violation of their contractual obligations.
LEGAL REASONS:
While deliberating on the issue before the court, the court was of the opinion that the bonus plan
that TCP had proposed and thereafter initiated was definite. On this note, the modifications that
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TCP made to the bonus plan that it had with Emil Bahr was unacceptable, and it should not have
been discrete. On this note, TCP had the responsibility of making it public and known to any
changes that it had to its bonus plan. It should have communicated these changes to its
employees, basically because they would be affected by the changes that were made to the bonus
plan. Note that, it is a matter of justice to communicate any changes to a plan that would affect
the employees of organizations: more so, if these employees are party to the plan.
On this note TCP was found to have breached its contractual obligation to Bahr, by introducing
terms without communication or informing her. Furthermore, as a consequence of this breach of
contract, the plaintiff, who was Bahr, was affected significantly in a financial manner; thus, the
breach of contract was significant enough for TCP to be held liable3. Furthermore, it was the
opinion of the court that no consideration existed for the plaintiff.
On this note, the judge believed that TCP should have stuck with the bonus plan that it initially
agreed with the plaintiff. Therefore, the court made a ruling that if TCP later on found that it was
unable to meet the conditions that were stipulated into the bonus plan; then, it was their
responsibility to notify its employees on any changes that are made4. However, because TCP did
not do this, the agreement it entered with its employees lacked consideration. Basing on these
facts, the actions of TCP could not qualify as a consideration that satisfies an element of a
contract. By stating that the plan was indefinite, TCP wanted to initiate an illusionary promise,
thus making the plan to be invalid because it did not have a valid offer.
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References
Bahr v. Technical Consumer Products, Inc. .,601 Fed. Appx.359 (6 th Cir. 2015)