Business Contract Law Discussion

Week 5: Discussion Board, Pt. 1 Michael and Cooper posted flyers all around their neighborhood, stating that they were looking for additional help mowing a park for a big Fourth of July party. The flyer invited interested individuals to contact Michael with their hourly rates and three past clients whom Michael could contact for references. The flyer also gave a local mailing address for this purpose. Leaving class one night, Lauren Pendleton happened to notice the billboard. She immediately wrote to Michael indicating that she was available for lawn-mowing, and that her hourly rate was $15. She also listed the names and contact information of three prior clients.

Three days later, Michael wrote back to Lauren, stating that her references had all given excellent reviews, and asking whether Lauren would be willing to work for $10 per hour if he advertised her services in the program provided for the party. Lauren received the letter the day after Michael sent it, and wrote back the next day that she would be willing to drop her rate to $12 per hour plus the advertisement, but no lower. Four days later, having received no response, Lauren called Michael on the telephone to say that, because the event was only about two weeks away, she had assumed that Michael had decided to use another individual. For that reason, Lauren had booked another mowing job for the same day. Michael said, “No, I sent you a letter yesterday accepting your terms—you haven’t received it yet?

We have a contract, and I will expect you to mow!” (Assume that Michael really sent the letter when he said he did, and that he can prove it in court.) Later that day, Michael’s letter arrived in Lauren’s afternoon mail. Michael has filed a breach of contract claim against Lauren, and asked the court to order Lauren to mow the lawn. Assume that, if the court does not so order, Michael can and will hire a replacement individual for lawnmowing, but only at a higher cost. Also assume that all mailings were done properly. Lauren argues that she and Michael are not in a binding contract, because Michael waited too long to respond to her, and she withdrew her offer before Michael accepted it. Is Lauren’s argument correct? Explain, analyzing only the offer-and-acceptance issue, and not whether Lauren has breached or repudiated any contract.

Assuming that Lauren is in breach, having repudiated a valid and binding contract with Michael, is the court likely to issue an order compelling Lauren to mow for Michael? If not, what will the court do instead? Week 5: Discussion Board, Pt. 2 Have you witnessed any type of employment discrimination? If so, please give us a few details and tell us what federal employment law you believe was violated. (If not, please give an example of disparate treatment v. disparate impact for this week’s participation points.) Contract Law Jordan Kieffer BADM 320 Contract Law Has Changed ⮚ Contracts have become more standard–but yet more complex–so as to take into account every scenario. ⮚ Contract law usually boils down to whether something was performed as stated in the contract. ⮚ Employee contracts are rarely used, except in cases of professionals/non-competes. ⮚ Uniform Commercial Code: Adopted in almost all of states….regulates goods.

Contract • “Restatement of Contracts” definition: A contract is a promise or a set of promises for the breach of which the law gives a remedy, or the performance of which the law in some way recognizes as a duty. • Three big concepts: 1. Formation: 4 elements 2. Duties and enforcement 3. Defenses 8-3 Basic Formula for a Contract: 4 Elements 1. Offer – One of the parties made a promise to do or refrain from doing some specified action in the future. 2. Consideration – Something of value was promised in exchange for the specified action or nonaction. This can take the form of a significant expenditure of money or effort, a promise to perform some service, an agreement not to do something, or reliance on the promise.

Consideration is the value that induces the parties to enter into the contract. The existence of consideration distinguishes a contract from a gift. A gift is a voluntary and gratuitous transfer of property from one person to another, without something of value promised in return. Failure to follow through on a promise to make a gift is not enforceable as a breach of contract because there is no consideration for the promise. 3. Acceptance – The offer was accepted unambiguously.

Acceptance may be expressed through words, deeds or performance as called for in the contract. Generally, the acceptance must mirror the terms of the offer. If not, the acceptance is viewed as a rejection and counteroffer. 4. Mutuality – The contracting parties had “a meeting of the minds” regarding the agreement. This means the parties understood and agreed to the basic substance and terms of the contract. When the complaining party provides proof that all of these elements occurred, that party meets its burden of making a prima facie case that a contract existed. For a defending party to challenge the existence of the contract, that party must provide evidence undermining one or more elements. Offer and Acceptance ⮚ Offer: Showing a willingness to enter into a bargain in such a way that another person would interpret that they could accept and it would conclude the negotiations. ○ Can be through words or actions.

Advertisements can be offers. ○ Negotiations are not offers. Buyers have to be able to walk away from estimates or price quotes. Offer and Acceptance ⮚ Acceptance – once an offer has been made, the other party can accept the offer in any reasonable way, including starting performance. ⮚ The party who accepts can back out up until performance begins. ⮚ Factors include: ■ Were terms finalized? ■ Did performance begin? ⮚ Offer + Acceptance = a “meeting of the minds.” Consideration ⮚ Consideration: A contract must include a promise and a return promise. ○ It cannot only go in one direction. Both parties have to get something valuable (a good or service). ○ A promise of a gift is not enforceable because one party gets nothing. ○ The exchange doesn’t have to be equal- one person may value something more than someone else. Performance/Enforcement ⮚ Substantial Performance – Doing exactly what is in the contract is not always possible, but the parties have to reasonably live up to the terms.

○ If one party does not materially perform, the other party no longer has to perform. ○ Failure to perform “duties” (obligations) is called “breach.” Contract Enforcement ⮚ Enforceable → court upholds validity. ⮚ Unenforceable → party has justifiable reason for noncompliance. ⮚ Valid → essential requirements present. ⮚ Void → lacks validity/enforceability. ⮚ Voidable → party has right to withdraw. 8-9 Enforcement ⮚ What happens when one party breaches? Options: ○ Damages – The party who is harmed can request money from the other party equal to the loss from the breach. ○ Specific performance – If it is still possible to perform the contract, the court can require the party to perform. Defenses Certain things can make contracts void even though both parties agreed on the terms and there was valuable consideration. • Unconscionability – If one party tricked another party into agreeing to an unfair contract, the court may not enforce it. • Often comes up when businesses try to trick poor or uneducated clients.

Contract Formation Offeror Offer Capacity and Legality Offeree Acceptance AGREEMENT Supported by Consideration 8-12 Defenses ⮚ Fraud or Duress – Lying or misrepresenting something in negotiations can make a contract void. ⮚Also, taking advantage of someone in a bad situation can make a contract void. ⮚If a company knows about a flaw in a product and covers it up, the contract to buy it is void. Defenses ⮚ Criminality/Public Policy – If the terms of a contract require illegal behavior, or if they go against Congress’ stated goals, it will be declared void. Mailbox Rule The “mailbox rule” or the “postal acceptance rule” is a term of common law contracts which determines when a contract has been formed where the parties are communicating via the mail. The basic thrust of the rule is that an acceptance of an offer that is sent before a revocation of the offer is received constitutes a contraction has been formed.

Capacity of Parties ⮚ Minors ⮚Under age 18 ⮚Exceptions for necessaries ⮚Voidable/disaffirm ⮚ Intoxicated persons https://www.youtube.com/watch?v=KAi6ARrn5YQ ⮚ Mentally incompetent or impaired 8-16 Oral Contracts Generally as enforceable as written agreements Informal Everyday examples: ▪ Buying fast food ▪ Vending machines 8-17 Statute Of Frauds Land Debts of Others Certain Contracts Must Be In Writing 1 Year Goods = $500+ 8-18 Contract Fact Pattern Michael and Cooper posted flyers all around their neighborhood, stating that they were looking for additional help mowing a park for a big Fourth of July party. The flyer invited interested individuals to contact Michael with their hourly rates and three past clients whom Michael could contact for references.

The flyer also gave a local mailing address for this purpose. Leaving class one night, Lauren Pendleton happened to notice the billboard. She immediately wrote to Michael indicating that she was available for lawn-mowing, and that her hourly rate was $15. She also listed the names and contact information of three prior clients. Three days later, Michael wrote back to Lauren, stating that her references had all given excellent reviews, and asking whether Lauren would be willing to work for $10 per hour if he advertised her services in the program provided for the party. Lauren received the letter the day after Michael sent it, and wrote back the next day that she would be willing to drop her rate to $12 per hour plus the advertisement, but no lower. Four days later, having received no response, Lauren called Michael on the telephone to say that, because the event was only about two weeks away, she had assumed that Michael had decided to use another individual. For that reason, Lauren had booked another mowing job for the same day.

Michael said, “No, I sent you a letter yesterday accepting your terms—you haven’t received it yet? We have a contract, and I will expect you to mow!” (Assume that Michael really sent the letter when he said he did, and that he can prove it in court.) Later that day, Michael’s letter arrived in Lauren’s afternoon mail. Michael has filed a breach of contract claim against Lauren, and asked the court to order Lauren to mow the lawn. Assume that, if the court does not so order, Michael can and will hire a replacement individual for lawnmowing, but only at a higher cost. Also assume that all mailings were done properly.

Lauren argues that she and Michael are not in a binding contract, because Michael waited too long to respond to her, and she withdrew her offer before Michael accepted it. Questions Is Lauren’s argument correct? Explain, analyzing only the offer-and-acceptance issue, and not whether Lauren has breached or repudiated any contract. Assuming that Lauren is in breach, having repudiated a valid and binding contract with Michael, is the court likely to issue an order compelling Lauren to mow for Michael? If not, what will the court do instead? Employment & Discrimination Law Jordan Kieffer BADM 320 Federal Anti-Discrimination Laws Title VII of the Civil Rights Act of 1964: Prohibits discrimination in hiring and other aspects of employment on the basis of race, color, religion, sex, or national origin. Age Discrimination in Employment Act of 1967: Protects workers 40 years old and older from arbitrary age discrimination.

Equal Pay Act of 1963: Prohibits sex discrimination in payment of wages to women and men who perform substantially equal work. Rehabilitation Act of 1973, Section 503: Prohibits job discrimination on the basis of a handicap. Americans with Disabilities Act: Gives individuals with disabilities civil rights protections similar to those given to individuals on the basis of race, sex, national origin, and religion. Civil Rights Act of 1991: Provided increased financial damages and jury trials in cases of intentional discrimination. Provisions Title VII Civil Rights Act of 1964 ▪ ▪ Employers with 15+ employees Eliminate job discrimination      ▪ Race Color Religion Sex National origin Discrimination regarding      Discharge Refusal to hire Compensation Terms, conditions, or privileges Bona fide occupational qualifications (BFOQs) 20-3 Enforcement of Title VII Civil Rights Act of 1964 ➢ Equal Employment Opportunity Commission ➢ Charges Within 180 Days ➢ Commission Remedies •Back pay/front pay/injunction

•Compensatory/Punitive damages •Job reinstatement 20-4 Expanded Meanings of Discrimination  Disparate Treatment https://www.youtube.com/watch?v=b8QwNBNfvXQ  Disparate Impact  Griggs v. Duke Power Company:  Facts of the case: Willie Griggs filed a class action, on behalf of several fellow AfricanAmerican employees, against his employer Duke Power Company . Griggs challenged Duke’s “inside” transfer policy, requiring employees who want to work in all but the company’s lowest paying Labor Department to register a minimum score on two separate aptitude tests in addition to having a high school education. Griggs claimed that Duke’s policy discriminated against African-American employees in violation of Title VII of the 1964 Civil Rights Act. On appeal from a district court’s dismissal of the claim, the Court of Appeals found no discriminatory practices. The Supreme Court granted certiorari. 

Question: Did Duke Power Company’s intradepartmental transfer policy, requiring a high school education and the achievement of minimum scores on two separate aptitude tests, violate Title VII of the 1964 Civil Rights Act?  Conclusion: Yes. After noting that Title VII of the Act intended to achieve equality of employment opportunities, the Court held that Duke’s standardized testing requirement prevented a disproportionate number of African-American employees from being hired by, and advancing to higher-paying departments within, the company. Neither the high school graduation requirement nor the two aptitude tests was directed or intended to measure an employee’s ability to learn or perform a particular job or category of jobs within the company. The Court concluded that the subtle, illegal, purpose of these requirements was to safeguard Duke’s long-standing policy of giving job preferences to its white employees.

Disparate Treatment and Impact Disparate Treatment Using race, color, religion, sex, or national origin as a basis for treating people differently or unequally Disparate Impact Fewer minorities are included in the outcome of testing, hiring, or promotion practices than would be expected by numerical proportion 6 Examples  Example 1: Disparate Treatment  If only African American applicants are required to take a preemployment assessment test.  Disparate Impact – If you test all applicants and only African Americans are eliminated based on the results of the assessment.  Example 2: Disparate Treatment  During the annual re-screen of all of your employees, you re-screen all of your female employees and only half of your male employees.  Disparate Impact – During your annual re-screen, the results from the background check showed only female employees had new criminal record convictions that would affect their current role or position within the organization.

Issues in Racial Discrimination Five Racial Categories 1. American Indian or Alaska native One Ethnicity Category 1. Hispanic or Latino 2. Asian 3. Black or African American 4. Native Hawaiian or Other Pacific Islander 5. White 8 Other Discrimination Bases National origin  Language Religion  Reasonable accommodation Sex Sexual harassment  Hostile work environment  Quid Pro Quo Pregnancy Discrimination Act Equal Pay Act Sexual orientation  Now likely protected under Title VII 20-9 Question Does Title VII protect employees from discrimination on the basis of sexual orientation or transgender status? Answer Previously, it did not, but recent changes in the law say YES.

Recent federal law and EEOC guidance provide that “Discrimination against an individual because of gender identity, including transgender status, or because of sexual orientation is discrimination because of sex in violation of Title VII.” http://www.eeoc.gov/eeoc/newsroom/wysk/enforce ment_protections_lgbt_workers.cfm State Law Issues of Sex Discrimination Major Issues for Women 1. Getting into professional and managerial positions and out of traditional female-dominated positions 2. Achieving pay commensurate with that of men 3. Eliminating sexual harassment  Quid pro quo  Hostile work environment 4. Being able to take maternity leave without losing jobs 13 Sexual Harassment Unwelcome sexual advances, requests for sexual favors, and other verbal or physical conduct of a sexual nature when submission to or rejection of this conduct affects an individual’s employment, interferes with an individual’s work performance, or creates an intimidating, hostile, or offensive work environment.

14 Types of Sexual Harassment Quid Pro Quo Hostile Work Environment Something is given or received for something else. The employee perceives a hostile or offensive work environment by virtue of uninvited sexually oriented behaviors or materials present in the workplace. 15 Ledbetter v. Goodyear Facts: Over her nineteen-year career at Goodyear Tire, Lilly Ledbetter was consistently given low rankings in annual performanceand-salary reviews and low raises relative to other employees.

Ledbetter sued Goodyear for gender discrimination in violation of Title VII of the Civil Rights Act of 1964, alleging that the company had given her a low salary because of her gender. A jury found for Ledbetter and awarded her over $3.5 million, which the district judge later reduced to $360,000. Goodyear appealed, citing a Title VII provision that requires discrimination complaints to made within 180 days of the employer’s discriminatory conduct. The jury had examined Ledbetter’s entire career for evidence of discrimination, but Goodyear argued that the jury should only have considered the one annual salary review that had occurred within the 180-day limitations period before Ledbetter’s complaint.

The U.S. Court of Appeals for the Eleventh Circuit reversed the lower court, but without adopting Goodyear’s position entirely. Instead the Circuit Court ruled that the jury could only examine Ledbetter’s career for evidence of discrimination as far back as the last annual salary review before the start of the 180-day limitations period. The Circuit Court ruled that the fact that Ledbetter was getting a low salary during the 180 days did not justify the evaluation of Goodyear’s decisions over Ledbetter’s entire career. Instead, only those annual reviews that could have affected Ledbetter’s payment during the 180 days could be evaluated. The Circuit Court found no evidence of discrimination in those reviews, so it reversed the District Court and dismissed Ledbetter’s complaint. Issue: Can a plaintiff bring a salary discrimination suit under Title VII of the Civil Rights Act of 1964 when the disparate pay is received during the 180-day statutory limitations period, but is the result of discriminatory pay decisions that occurred outside the limitations period? Conclusion: No. By a 5-4 vote the Court ruled that Ledbetter’s claim was time-barred by Title VII’s limitation…


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