Comprehensive Analysis of Contract Law: Case Studies and Disputes

This assignment provides a comprehensive analysis of several contract law cases. The first case involves Jordan and CCC, examining disputes over bonus terms, breach of contract, and the enforceability of a non-compete clause. The second case focuses on the Fair Labor Standards Act, addressing overtime pay regulations and the interplay between federal and state laws. The third case involves Donna Jones and the Boston Consulting Group, analyzing offer and acceptance, option contracts, and the validity of a bonus promise. Finally, the fourth case examines a land purchase agreement and issues of misrepresentation regarding property conditions and zoning laws. The assignment explores legal principles, analyzes contractual obligations, and evaluates the arguments presented by each party involved. The analysis covers a wide range of contract law concepts, providing a detailed examination of the issues at hand.

LAW OF CONTRACTS
Question 1:
In the above case, Jordan terminates the contract due to several contractual disputes arising between
him and the company CCC. Among the contentions taken by him he can approach the court for the
inconsistency in the oral and written contract regarding bonus and other provisions as mentioned
under clause (1), (2) and (4). As regards the bonus promised to Jordan, it was agreed on April 8th that
he would be entitled to 20% work bonus for new business and 10% for existing clients. The same
formed a contractual relationship with the company accepting the same. The inconsistency in the
terms of oral and written contract is a matter of dispute, which he can approach the court for a
possible redressal. (Burling)Similarly, the company by accepting to grant him the fringe benefit of
providing him with the company car has entered into a contractual obligation. By not honoring the
terms of contract as agreed upon by the parties on April 3rd, the company has committed breach of
contract.
As regards question no. 2 whether Jordan is entitled to the raise in his salary over the telephonic
conversation, there has been a clear case of offer and acceptance. While the contract law stipulates
that the communication of acceptance has to be made, it has to be made by a proper channel.
(Whincup) The offer made by Jordan was clearly acknowledged by CCC, which gives it 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 would
state that the same is not enforceable as the termination of contract took place before the expiry of the
contract period, for the breach of contractual obligations on the part of CCC. Where the employer is at
fault for non-compliance of contractual obligations, the covenant cannot be made applicable to
employees. Although in this case, Jordan quit voluntarily, it has to be noted that the company has not
been able to abide by its contractual obligations mentioned by it at the time of entering into the
contract. Jordan having terminated the contract well before the stipulated time will not violate the
non-compete covenant. The burden of proof is on the Jordan here to prove that if the same is made
applicable, 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,
(Dictionary of American History) the rules passed by the Federal and the State Government is
applicable for all employees, unless otherwise mentioned. While the rules covers all the employees
working in the enterprise, the same are not applicable for employees working in the executive,
managerial and supervisory capacity. The regulations also stipulate rules and methods to assess and
calculate as to who are governed by the regulations. In doing so, there are a number of parameters
which have been adopted to calculate the regular hourly wage and the number of hours put in by the
employee in the calendar week.
However, the Federal regulations are not made applicable to those employees who have not
completed one year of service. The same is arbitrary and violates the principles of equity and the Fair
Labor Standards. Therefore, my contention is that the regulations under clause (c) are invalid and
therefore not maintainable in law and facts. While the Fair Labor Standards Act covers diverse range
of workers and employees, who are in an employment relationship under employment coverage, it is
silent on the minimum term of employment to be completed by employees to be eligible for overtime
pay. (Hernandez)The Act is made applicable to all employees, whether contractual, permanent, or
temporary except personnel falling under category of ‘Exempt’ employees. (Vicki Brittain) In other
words, the act does not state any rule stipulating the time limit to qualify for overtime 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 ‘welfare laws’, 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 the
federal laws or otherwise. The employer is of the argument that the state government has passed a
regulation necessitating the companies to pay an overtime pay of 200 percent of the regular hourly
wages, while the federal laws has stipulated a rate of 150 percent of an employee’s regular hourly
work.
In answer to the claim made by the employer, in situations where the federal, state and local laws are
in conflict over certain terms and conditions, the regulations that are more favorable towards the
employees apply to enterprises. The United States Department of Labor rules makes it clear that in
cases where “the employee is subject to both the state and federal overtime laws, the employee is
entitled to overtime according to the higher standard” i.e., the standard providing the higher overtime
pay. (U.S. Department of Labor)The employer has to therefore comply with the provision that is most
favorable 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 which
establish different wage and hour rules to certain employees or industries. It is important to establish
whether there are exemptions as to the specific type of business or work which necessarily requires
long hours of work.
Question No. 3
In 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 offer
was made with a promise that she would be made the VP within 2 years. This communication
amounts to offer as Michelle communicated her intent that would bind both the parties into a contract
if the same was accepted by Donna.
As regards Question No. 2, it can be implied that the Michelle had responded to Donna stating that
she would keep the current position open till the end of the month, for an answer. Hence this amounts
to option contract as the contract is made between the two of them to keep the offer open till the end
of the month. Secondly, this offer is also purported by the consideration that Donna would receive a
substantial 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 an
counter offer to Michelle that she would be keen on considering the position if she could stay for only
two years instead of the earlier offer of five years proposed by Michelle. While in normal
circumstances, counter offer results in repudiation of the earlier offer, in an option contract such as
this, a counter offer made during the option period does not terminate the power of acceptance by the
offeree. This is because the offeree has a contractual right to have the offer which is held open to him
till the end of the month.
In answer to Question 4, the best argument that Donna did not accept the offer by her voice mail on
January 21st was because Michelle was not in her office on the day the voice mail arrived. Hence, she
was not aware of the same. The rule pertaining to contracts states that the communication regarding
acceptance has to be communicated to the offerror. (Preface PR 15)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 offer
could not be revoked prior to her voice mail on 21st. The reason being, in an option contract was
formed and the offer could not be revoked before the end of January. In cases of option contracts such
as this, the offeror has promised to keep the job open for a certain period of time, with a
consideration; (Cozzillio) albeit, a promise that if she would accept the offer, she would be made the
VP within the next two years. The offer is irrevocable for the stated time period. Hence, in this case
Donna’s acceptance is a valid one.

Question No. 6 relates to the fact whether Donna is entitled to bonus as per the conversation held on
18th January. While bonus was promised with an intention that she would accept the initial offer, the
revocation of contract will not entitle her for the same. However, since during the conversation, it was
stated that she is entitled to bonus in recognition to her past performances, the reason of budget
constraints is not a valid excuse for the company to not give her the bonus. In this case, a contractual
obligation arose between the company and Donna when a promise for bonus was made and was
independent to the other facts, whether she would accept the offer of employment or not. Whether it is
a case of oral or implied contracts, the courts have in a number of cases found that the employers have
an obligation to pay to the employees the stipulated amount as bonus as promised. Donna, therefore
has reasonable grounds to prove that she is entitled for the bonus for her commitment to the company
and the past performances as well as the oral communication made on the 18th of January for a
promise of paying bonus.
Question No. 4.
In the present case, the buyer X entered into a valid contract with Company Y for the purchase of
land, and is presumed that he has taken all reasonable care and caution to ensure that the property is
free of encumbrances. While the contract Law protects the rights of the buyer to seek information
from the seller, the seller is not at an obligation to provide all the information that he knows about the
property. In a case such as this if Y does not make known the facts pertaining to roads or zoning it
does not amount to misrepresentation or mistake of facts. The buyer on the other hand has a duty to
make use of all the readily available public information and take opportunity to inspect the property
and assess the property and its neighborhood. (Kenneth W. Clarkson) In the present case, therefore,
the fact that the county is building a road nearby is a matter of public knowledge as the plans for the
road has been in works for two years prior to the execution of contract.
Similarly, the restrictions contained in local zoning laws applicable to the property that would allow
it to use the property as a distribution center can be found out through the public records as the zoning
ordinances is a matter of public information where the buyer can easily access such information. The
seller can knowingly or unknowingly misrepresent the land use affecting the property, which does not
provide a ground for the buyer the basis of rescission of contract. In both the cases mentioned in
clause (b) and (c), the buyer need necessarily rely on the seller’s statement about the condition of the
building, the nature of the neighborhood or regarding the zoning ordinances pertaining to the present
property. Hence, in these cases, there is no misrepresentation on the part of the seller rendering it to be
a voidable contract.
Company X can however, opt to back out of the contract based on the first factor mentioned in the
case, due to the non-conformity of the report to the actual facts and dangers of the property. The fact
that the inspection has been conducted is evident to prove that all reasonable care and caution has
been taken to ensure that the property is in compliance with the environmental norms. While the X
has exercised his right to seek information, Y has exercised his corresponding duty to speak, and
therefore have appointed independent inspection.
However, in this case of the material misrepresentation, the inspection report stated that there were no
defects in the property and was free of certain pollutants, while the property in actuality had latent
defects and polluted. While in normal cases, misrepresentations may relate to matters that the buyer's
inspection of the property can reveal, in the present case, the third party failed to report the latent
defects in the property. This leads to reliance on the negligent misrepresentation of the third party
report, thereby rendering it a voidable contract. The buyer has a remedy to revoke the contract, on the
basis that the inspection report was found to be faulty and inaccurate.
In this case, the buyer could possibly take a contention that he relied on the fact that the property is
free of all encumbrances, which prompted him to enter into the contract. Upon finding that the
property did suffer from latent defects, he realized that he had relied on the negligent
misrepresentation of the property report, which gives him a ground to back out from the contract.
However, the onus and the burden of proof are now on the buyer to show that the latent defect is of

serious nature and if he had known earlier, he would not have bought the property. The buyer has to
also prove that the latent defects are of such nature so as to cause material destruction to property and
health of the people residing in the premises, if he were to purchase the land belonging to Company
Y.
The remedies available to the buyer is by way of rescission of contract, (Cozzillio) where he can set
aside the contract, recover all the payments made to the seller and thereby put the parties back in their
original position as though the contract has not been entered into at all.
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