Final Contract Analysis
Contract analysis
scenario one—damages determination: Alfred and Barbara own adjoining farms
in Dry County, an area where all agriculture requires irrigation. Alfred bought
a well-drilling rig and drilled a 400-foot well from which he drew drinking
water. Barbara needed no additional irrigation water, but in January 1985, she
asked Alfred on what terms he would drill a well near her house to supply
better-tasting drinking water than the county water she has been using for
years. Alfred said that because he had never before drilled a well for hire, he
would charge Barbara only $10 per foot, about one dollar more than his expected
cost. Alfred said that he would drill to a maximum depth of 600 feet, which is
the deepest his rig could reach. Barbara said, “OK—as long as you can
guarantee completion by June 1, we have a deal.” Alfred agreed, and he
asked for $3,500 in advance, with any further payment or refund to be made on
completion. Barbara said, “OK,” and she paid Alfred $3,500.
Alfred started to drill on May 1. He had reached a depth of
200 feet on May 10 when his drill struck rock and broke, plugging the hole. The
accident was unavoidable. It had cost Alfred $12 per foot to drill this 200
feet. Alfred said he would not charge Barbara for drilling the useless hole in
the ground, but he would have to start a new well close by and could not
promise its completion before July 1.
Barbara, annoyed by Alfred’s failure, refused to let him
start another well. On June 1, she contracted with Carl to drill a well. Carl agreed
to drill to a maximum depth of 350 feet for $4,500, which Barbara also paid in
advance, but Carl could not start drilling until October 1. He completed
drilling and struck water at 300 feet on October 30.
In July, Barbara sued Alfred, seeking to recover her $3,500
paid to Alfred, plus the $4,500 paid to Carl.
On August 1, Dry County’s dam failed, thus reducing the
amount of water available for irrigation. Barbara lost her apple crop worth
$15,000. The loss could have been avoided by pumping from Barbara’s well if it
had been operational by August 1. Barbara amended her complaint to add the
$15,000 loss.
In a minimum of a
1,000-word contract analysis, discuss Barbara’s suit against Alfred. What
are Barbara’s rights, and what damages, if any, will she recover?
Cite any direct quotes or paraphrased material from outside
sources. Use APA format.
Contract analysis
scenario two—remedies determination: Mundo manufactures printing presses.
Extra, a publisher of a local newspaper, had decided to purchase new presses.
Rep, a representative of Mundo, met with Boss, the president of Extra, to
describe the advantages of Mundo’s new press. Rep also drew rough plans of the
alterations that would be required in Extra’s press room to accommodate the new
presses, including additional floor space and new electrical installations, and
Rep left the plans with Boss.
On December 1, Boss received a letter signed by Seller, a
member of Mundo’s sales staff, offering to sell the required number of presses
at a cost of $2.4 million. The offer contained provisions relating to the
delivery schedule, warranties, and payment terms but did not specify a
particular mode of acceptance of the offer. Boss immediately decided to accept
the offer and telephoned Seller’s office. Seller was out of town, and Boss left
the following message: “Looks good. I’m sold. Call me when you get back so
we can discuss details.”
Using the rough plans drawn by Rep, Boss also directed that
work begin on the necessary press room renovations. By December 4, a wall had
been demolished in the press room, and a contract had been signed for the new
electrical installations.
On December 5, the President of the United States announced
a ban on foreign imports of computerized heavy equipment. The ban removed—from
the American market—a foreign manufacturer that had been the only competitor of
Mundo. That afternoon, Boss received an email from Mundo stating, “All
outstanding offers are withdrawn.” In a subsequent telephone conversation,
Seller told Boss that Mundo would not deliver the presses for less than $2.9
million.
In a minimum of a
1,000-word contract analysis, discuss the following questions: Was Mundo
obligated to sell the presses to Extra for $2.4 million? Assume Mundo was so
obligated. What are Extra’s rights and remedies against Mundo?
Cite any direct quotes or paraphrased material from outside
sources. Use APA format.
