Question

Instructor:         Williams

Course:               Contract Law

Project:               Contract Project/Spring 2018

Facts

Kobe owns a consulting business, Kobe’s Basketball, Inc., but he wants to purchase and operate a restaurant. He meets a businessman name LeBron who owns a restaurant called King’s Pizza, LLC. He has two restaurants locations, one in Houston and one in Cleveland. LeBron wans to sell the one in Houston, so he can move back to Cleveland to operate his Cleveland restaurant full time. LeBron’s restaurant, King’s Pizza, LLC, has a written contract with the local sports arena to sell food during the football games played at the arena.

Kobe meets with LeBron and LeBron verbally agrees to sell Kobe the restaurant that he operates in Houston for $50,000. Kobe wants to put about $10,000. Down and pay the balance of $40,000 over 3 years. Lebron agrees to the arrangement and they sign a contract for the sale of LeBron’s restaurant, King’s Pizza, LLC, to Kobe. The written contract shows Kobe’s Basketball, Inc. as the purchaser of LeBron’s restaurant.

Kobe meets another restaurant owner at the arena, named Jordon. Jordon operates a restaurant at the same arena center called Over the Rim Hot rolls, LLC. Jordan had introduced Kobe to LeBron. Jordan wanted to buy the business owned by LeBron but could not raise the money.

Since, it required a license from the City of Houston, in the name of the owner of the business, to operate at the arena, Jordan and Kobe enter into a verbal agreement whereby Jordan would manage the business, King’s Pizza LLC, for Kobe for 10% of the revenue of the business, since Kobe did not have the required license in his name. Jordan would be responsible for the day to day operations of the business, King’s Pizza, LLC, and for training Kobe on how to operate a restaurant at the arena.

Kobe needs the license from the city to operate the new business that he has purchased from LeBron, so he asks Jordan if he can operate the business under Jordan’s license, until he can get his own license. Jordan verbally agrees to the arrangement. Kobe believes that it may take about a year to get his license from the city, but he is not sure. This projection by Kobe is based on the fact that Shaq has been hired by Kobe to secure the license for Kobe and Shaq said that he has done this many time for other companies and it general takes about a year each time.

Jordan receives all of the revenue for the new business through his business account at the arena and then he gives Kobe 90% of the gross revenue each month for the first 10 months, until October 2017. Then Jordan finds out that Kobe has applied for and received a license to operate the new business under Kobe’s individual name, when Kobe then notifies Jordan that he is terminating the contract between them.

Kobe signs a new contract with the arena under his business’ name, then starts to operate the new business under his new business’ license in November 2017. Jordan receives the revenue from November 2017 into his account and keeps all of the deposit, $20,000. Jordan stated that the verbal agreement between him and Kobe did not have an end date, so Kobe had breached the agreement by attempting to terminate the contract and, therefore, Jordan is entitled is entitled to keep all of the $20,000. From operations for November 2017 as damages for the breach by Kobe. Kobe demands that Jordan give him the 90% of the revenue for November 2017 that he is entitled to and Jordan refuses.

Kobe personally sues Jordan for breach of contract and Jordan counter sues Kobe for Fraud and Breach of Contract. Kobe, the Plaintiff, hires groups 1,3 and 5 to represent him and Jordan hires groups 2,4 and 6 to represent him.

Assignment

            Determine what types of contracts have been created in the above fact pattern (e.g., bilateral, unilateral, express, implied, verbal, written, executed, executory, etc.)? What are the terms of the contracts, if any have been created? Who has breached the contracts, if any? Are the contracts enforceable? Then prepare a legal defense for your client. Yu should be prepared to make an oral presentation f about 20minutes. All group members should participate in the preparation of the oral defense and the written brief (8-10 pages) to be submitted at the time of the presentation.

Grade

                Each team member will receive an individual grade for the written brief and an individual grade for the oral presentation If team members agree to work collectively on a single brief, then a single grade will be given to all participants on that brief. Project Due Date: 4/18/2018

Addendum – Stipulated Classroom Law:

A general partnership agreement (contract is created when two or more individuals start a business enterprise to make profits; they share equally in the management of the enterprise, they equally share the risks and liabilities associated with the enterprise and they share equally in the profits of the enterprise.

Assignment No. #2

You, the student/ attorney, are to draft a contract based on your understanding of what the terms of the verbal agreement are between your client (plaintiff/defendant) and the opposing party to the dispute. The contract should identify the parties, the consideration, the nature of the offer and the form of acceptance, the start date of the contract and the termination period, and conditions (precedent or subsequent) to the enforcement of the contract, any third party beneficiaries to the contract, what constitutes a material breach of the contract as well as wat damages can be awarded for breaching the contract, plus any other contractual clauses that you may deem appropriate. Type written, 1.5 spacing, 12-point font (Times Roman,), attach this signed cover page to contract. Due before class period April 19.

Answer 1

Oral partnership agreement need not be in writing to be effective and depending on the actions of the partners.

a bilateral contract is an agreement between at least two people or groups. Most business and personal contracts fall into this category.

Agreement is when a proposal is accepted by the person to whom it is made. It may be oral or written.

Contract is when an agreement is enforceable by law. it is generally written and creates legal obligation.

In the given case study, Jorden has verbally agreed for Jordan to use his name until he gets the licence under the assumption that licence will be received in one year. But it must be noted that the agreement is oral and not written so it cannot be considered as a legal contract.

Neither was the condition of sharing of profits in ratio of 10 and 90 was recorded in written.

The given condition can be termed as bilateral contract rather which can be explained as below:

A bilateral contract is the most frequently understood instance of contract. All business contracts in which each party makes a promise to the other party in the contract is a bilateral contract. Bilateral means that both sides are involved equally.

Bilateral business contracts bind both sides to perform an action. Bilateral business contracts give rights to both parties, as well as assigning each party with an obligation to action which they are expected to discharge. In bilateral business contracts, both sides have given consideration.

As a result of these three circumstances the normal requirements of a contract have been fulfilled. A bilateral contract requires an acknowledgment by the offeror of the oferee's acceptance.

Bilateral business contracts are mutually binding to both the offeror and the offeree. Depending on the type of contract, the parties in business contracts may also be referred to as promisors and promisees. A bilateral business contract becomes binding to both parties at the moment that the promises are exchanged by both parties.

Unless obviously intended otherwise, business contracts are presumed to be bilateral in nature.

In order to make the definition of bilateral business contracts more readily apparent, a bilateral contract may be referred to as a contract that only entails an exchange of promises. Contracts that call for performance at the moment that the contract is made, or the exchanging of a promise for a promise are not considered bilateral contracts..

Although many bilateral business contracts involve negotiation, this is merely a common element of bilateral business contracts, not an essential element.

Bilateral business contracts are different from unilateral contracts in that there is a mutual exchange of responsibility.

According to contract law, an oral contract is not considered an implied contract. An oral contract is an agreement that is agreed upon only by spoken communication. Although an oral contract originates from the mouth, it is common for a written contract to be created after the oral contract is stated.

A bilateral contract is a legally binding contract formed by the exchange of mutual or reciprocal promises. An offer in the form of a promise is accepted by a counter-promise.

Bilateral contracts, however, can be formed in writing or orally.

The contract / agreement created is oral but both parties have agreed for the terms so it can be considered as a bilateral contract.

If we talk about breach of contract, Kobe can not call that Jordan has done breach of contract as the permission of using the licence was oral but was not for life time, it was rather as considering that the permission shall be obtained by Jordan later and until Jordan receives the llicence, he was allowed to use the licence of Kobe.

As soon as Kobe got licence he starting using it.

Kobe is wrong on the part of keeping the deposit with him as there was no discussion on the deposit forfeiture in case when licence shall be received.

Legal defences

Breach of contract was waived

– the basis of this defence is that the claimant did not act on the breach either within a reasonable time after it or at all. In a contract where the defendant is due to perform in a certain way by reference to a timescale, if he or she does not and the claimant then does nothing for a considerable period afterwards to complain of a breach or continues to act as if there has been no breach, he or she may be considered to have waived it.

Contract was varied

it is common, even where there is a clear contract in writing, for a defendant to argue that the contract was altered by agreement, and that he or she has not breached the agreement as alleged or at all. If a defendant wants to argue this it will need to be clearly stated in the defence filed with sufficient particulars such as how the contract was varied, when, in what way. It will not be enough just to make a vague reference.

Estoppel as breach of contract defence

– this is a technical defence – in essence, it is based on a promise or action by the claimant which is inconsistent with a right to now make a claim – in other words the claimant is “estopped” from now succeeding.

Enforceable Contract

An enforceable contract is a contract that needs an offer and an acceptance.

When negotiating in a business agreement, one of the main considerations is whether the contract will be deemed as an enforceable under law. Constructed as legally binding instruments, a contract is a mutually assented to promise between two parties in a bargained for exchange. The steps to contract formation are: an offer; an acceptance; consideration; and enforceability.

Enforceable Law and Legal Definition

To enforce means to mandatory compliance with a contract. United States contract law provides that contracting parties have a right to commitment and enforceability. Parties mutually assenting agreement and signatory of a contract, are obliged to adhere to the rules contract law, by performing as promised.

Here the breach of contract shall not be considered or can be waived also as it was not written and those terms were not mutually agreed either.