Problems: Chapters 15, 16, 17, and 18

Posted: October 24th, 2013

Problems: Chapters 15, 16, 17, and 18

Chapter 15 – Problem 10

The chapter revolves around the concept of contract legality. The problem involves Peterson working as a professional engineer and architect in Hawaii. The Hawaiian state provides a law that requires architects and engineers to pay a particular fee for an operation license. Wilson attends to his working duties on a local ranch and prepares a 33,000-dollar invoice after the work is completed. However, the problem is that Wilson offered his services with an expired license of operation. Therefore, the problem in this case comes through the aspect of whether the contract between Wilson and the ranch is valid.

Going by the Hawaiian laws, Wilson is qualified to offer his services in the state only that his license is expired. Hence, the contract between him and the ranch is legal. If Wilson never met Hawaii’s licensing agreements, he would have been operating illegally. The Kealakekua Ranch is required to pay Wilson his due amount because he is qualified. However, the state may be inclined on giving him a fine. For Kealakekua Ranch, it would be unethical not to pay Wilson. His license may have been expired, but his services were performed with diligence.

Chapter 16

Problem 7

            The problem presented in chapter sixteen depicts two parties entering into a contract. However, the issue of this problem is that the contract has no proof. Moore and the bank make an agreement to conduct business through Moore’s company account. Moore’s company went on to conduct its business through his sons, Mike and Rocky. However, written checks from the company exceed the amount in the bank making Moore liable to pay the excess amount. However, the problem arises because Moore’s acceptance of liability in case such an event was oral rather than written.

Problem 10

The other problem in this case requires establishing the person responsible for writing the checks for Moore’s company. This person shows that he or she is not qualified or had a hidden agenda. This is because he or she should have counterchecked the bank balance and understood the limit of writing checks. With the contract between Moore and the bank being in oral form, it is enforceable in a court of law. If the contract were still in writing, the bank would not be able to enforce an oral contract unless Moore owns up to it (Collins, 2009). Indeed, it would be unethical if Moore failed to pay the bank the unsettled debts. This is because he agreed to accept liability when the two parties contracted.

Chapter 17 – Problem 4

The problem in this chapter involves reassignment of contracts between two parties to a third party. Primarily, Peterson entered into a three-year contract with Post Network television. However, one year into the contract, Post Network was bought by Evening News. The sale included ownership of the entire company including assigning of contracts. Peterson went on seeing out his contract but left the company for another job in a rival TV station. Evening News, in its interest, went to court because Peterson ignored the remaining year in his contract.

In this case, Evening News has every right to sue Peterson and seek legal redress to have him see out his contract (Collins, 2009). Even though the Evening News was not the initial party to the contract, its purchase of Post Network Company meant that it was now in charge of managing contracts. Peterson is only bound to his initial contract if it is clearly stated that he cannot transfer to another company. If not, management of the contract can be transferred to another owner. Peterson does not have the right to enforce the contract between the two companies because of limited authority. It would be ethical for Evening News to prevent Peterson from working for a rival company. Allowing it would compromise the competitive edge of Evening News.

Chapter 18 – Problem 9

This chapter brings out the problem of admitting responsibility for the extra costs incurred, despite the fact that the contract does not make this requirement. As agreed, Denison constructed a house for The Warrens but ended up incurring further costs than agreed in the contract due to unintentional deviations. Due to the extra expenses, Denison requires The Warrens to pay the extra expenses for constructing the house. However, The Warrens does not feel inclined to pay the due balance.

The contract between The Warrens and Denison is noted as providing a clause to remedy such a situation. The two parties may have discussed the cost in advance and included it into the contract. Hence, The Warrens would not be liable for extra expenses incurred. The consequences of Denison breaching the contract would have it liable to any expense or inconvenience caused to The Warrens. The appropriate remedy for breach of contract is the awarding of non-liquidated damages to the aggrieved party. The Warren in this case is not under any ethical obligation to pay Denison the due balance. This is because the due balance was incurred by Denison’s negligence on the work site (Collins, 2009).

Reference

Collins, H. (2009). The law of contract. London: Butterworths