Question

Ronald Smith owns a home at 7890 Brookfield Lane, Chicago, Illinois. The garage in the back of,

the house is beginning to fall down so he decides to build a modern two-car garage in its place.

He calls Garages R Us for a free estimate on a new garage. Sam "the Salesman" Jones comes out

and shows Mr. Smith the various styles of buildings and the costs involved. In addition to the

pictures, Mr. Jones tells Mr. Smith that once they tear down the old garage, they put a 1/4" layer

of gravel down. They then lay 10 steel rods widthwise and 4 steel rods lengthwise on top of the

gravel. Only when that is done do they start pouring the concrete. The extra gravel and rods

(which are not done by every company) are designed to give additional strength to the floor so

that there will never be a problem with it being able to hold 2 automobiles at one time. Sam

shows him some diagrams of what he is talking about.

Ronald is impressed and chooses the garage he likes best. Sam then asks how he intends to pay

for the work. When Ronald tells him that he was going to go to a bank to get a loan, Sam tells

him about the financing options they have through Garages R Us. Ronald likes the terms and

signs a contract for the building of the garage (which does not contain any information about the

gravel or the rods and does not contain any pictures as he had been shown) subject to approval of

the financing.

After the financing is approved, Garages R Us assigns their rights to payment from Ronald to the

Bedford Park Savings and Loan Association. Notice is sent to Ronald of the assignment.

The workmen tear down the original garage and start to construct the new one. Ronald, who is

retired, watches out of his back window every day as they work: As they begin to lay down the

gravel and rods, he notices that they are not doing what he had been told they would do. They

have scattered some gravel across the ground, but in no way is it 1/4" thick. They have spread

some rods across the ground, but there are 4 across widthwise and 2 across lengthwise.

Ronald immediately rails Sam and begins to complain. Before Sam can get out to the house to

talk to Ronald, the workers poured the concrete and it set. Ronald wants the concrete broken up

so that he can show Sam what is underneath. Sam tells him that if they do that, Ronald will be

responsible for the cost of laying down new concrete. They get into a shouting match, Ronald

tells the workers to stop work and Sam leaves.

After one month goes by, the Bank calls Ronald to find out where the first month payment is.

Ronald tells the Bank that he is not going to pay for work that wasn't completed and wasn't done

right to begin with. The Bank and wants to sue Ronald. Ronald wants to sue Garages R Us.

In your opinion do any of them have a good cause of action to sue anyone. If sued, does anyone

have any defenses? In addition to the elements of a contract, you may wish to discuss breach,

material breach, assignment, preventing performance, parole evidence and misrepresentation.

Answer 1

BREACH OF CONTRACT, A DICUSSION

Problem is unique one in which one party Smith make a contract with SAM to do some construction work. But construction is not completed and payment not realised by the party.

Here, we go back when contract is executed where smith signs the contract without containing any sufficient information like gravel, rods, or picture attached regarding work to be executed.

In order to create valid contract there mut be essential elements presents in the contract in order to avoid any dispute among the parties.

when the wok is not done and half way leaved by sam , smith cannot make any payment to the party argue that work is not upto the terms of the contract, so payment not released and party sue.

As per the CONTRACT OF BREACH, a contract is beached , the guilty party must remedy the breach. It is a legal cause of action and a type of civil wrong, in which a binding agreement is not honored by one or more of the parties to the contract by non-performance with the other`s party perforamance.

For true judgement once the terms of the contract must be examined, To do this they must examine the existence of a contract, the requirement of the contract, the plaintff must proved that contract is actually breached.

PAROLE EVIDENCE RULE

The purpose of that rule is to prevent a party from introducing evidence of prior oral agreement that occurred before or while the agreement was being reduced to its final form in order to alter the terms of the exiting contract. It is very important Rule which help for oral dicussion before making any final contract.

Here, agreement is made in good faith but due to exitence of some events like showing 1/4`` thick gravel and rods by smith demanded as they seen from their window but SAM totally refused to shown as work is covered and any damaged will cost to smith, but smith refused to pay and sam stop work and dispute arises.

So court decided by taking all the event together and fair view by all occurence studied.

Showing picture and all before making contract but during contract all such information not provided is an evidence which is in favour of Smith.