Question

Facts: Butcher Block is an Austin (Travis County), Texas company that packages meat products for sale to local convenience stores. When its refrigerated delivery truck suffers an engine failure, Butcher’s president Billy contacted Vaught Motors, an Oklahoma City company that sells refrigerated vans and trucks to businesses. Billy negotiated with Vaught sales associate Annie a valid contract for the immediate sale and next-morning delivery of a used 2017 Mitsubishi Fuso FE 140 for $45,000 (including a time-of-the-essence clause because Butcher could make no deliveries without the truck). Vaught delivered a vehicle promptly, but it was a 2019 GMC G33705 van. Butcher rejected delivery because the GMC van—though newer, so the price was good—had only half of the storage capacity as the Mitsubishi truck and thus would not allow Butcher to make all of its deliveries each day. Butcher instead bought an equivalent Mitsubishi truck from another seller for $50,000. The day it was supposed to receive the truck from Vaught, Butcher missed all of its deliveries, which were worth $10,000 in profit. It also had to rent a delivery truck for 10 days at $500/day so that it could fill its orders while it awaited the truck from the alternate seller.

Question 1: Explain whether Vaught performed or breached its contract with Butcher and what the potential damages are for Butcher.

Question 2: For this second question only, assume that Annie was a probationary sales associate, and her manager Madelyn had told her orally not to do contracts above $25,000 without consulting her, and Annie did not consult Madelyn about the contract with Butcher. Billy had contacted Annie directly through the Vaught website, which told customers “Our sales associates can get you the right truck for your business,” and it included Annie’s name and contract information. Explain under agency law principles whether Vaught or Annie (or both) is liable for money damages if Butcher were to win a judgment for breach of contract.

Essay 3: If Butcher sues Vaught in a court located in its home (Travis County, Texas), explain what court or courts have subject matter jurisdiction over the lawsuit and whether there is personal jurisdiction over Vaught. Also address whether Butcher can sue in a court if the contract contains a clause requiring the parties to arbitrate.

Answer 1

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Explain whether Vaught performed or breached its contract with Butcher and what the potential damages are for Butcher.

Vaught contravened the Butcher contract as it did not produce what was agreed-as in the 2017 Mitsubishi Fuso FE 140 case. They sent probably a higher value as reward along a comparable commodity to Butcher, but this did not satisfy the needs of Butcher and so the work was not executed as accepted. Butcher can sue Vaught for the damages that they incurred as a result of failure to perform:  $5,000 above the contract price which Butcher had to spend to buy a new truck; $ 10,000 in income from the missed profits on the day the deal was due; $ 5,000 for the 10-day loan of the delivery truck which they needed to take out to keep their company going.

For this second question only, assume that Annie was a probationary sales associate, and her manager Madelyn had told her orally not to do contracts above $25,000 without consulting her, and Annie did not consult Madelyn about the contract with Butcher. Billy had contacted Annie directly through the Vaught website, which told customers “Our sales associates can get you the right truck for your business,” and it included Annie’s name and contract information. Explain under agency law principles whether Vaught or Annie (or both) is liable for money damages if Butcher were to win a judgment for breach of contract.

Vaught made a misleading assertion on their website when they published that along with Annie's information, their sales associates are able to conduct the task of bringing customers a vehicle. Since Annie was told verbally that she could not accept orders above $25,000, that may be considered to be misrepresentation. There was no reported budget cap which meant that while Vaught was obligated to provide the appropriate information, key information was intentionally omitted. If Butcher wins the breach of contract case, Vaught can also be found liable based on this misrepresentation for money damages. Annie refused to perform her obligations as laid out by her boss resulting in the chain of events leading to contract violation. Despite of this, she could be seen to be in breach of her work contract (though it was an oral directive). The boss or organization may take steps to resolve this breach, if they chose. They can not however be found liable for any damages in the event of breach of contract.

If Butcher sues Vaught in a court located in its home (Travis County, Texas), explain what court or courts have subject matter jurisdiction over the lawsuit and whether there is personal jurisdiction over Vaught. Also address whether Butcher can sue in a court if the contract contains a clause requiring the parties to arbitrate.

A small number of local courts have control over subject matter held by regional courts. They will hear this case as the circuit courts have a minimum monetary cap but no maximum. In all cases, legislative country courts have jurisdiction, and so may hear this case. Also a company that has control over them will sue you in a case. You will typically prosecute a corporation where it conducts operations which will be Oklahoma city in this situation. So, you can't prosecute Vaught in Texas unless they have a Texas state branch. When Vaught has a Texas branch so the courts there are likely to have authority over it and the lawsuit will be charged and tried there. If the deal has an arbitration provision, which means that you will not be allowed to sue the other side and that you will have to settle conflicts through arbitration provision as per the given decisions.

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