QUESTION 1
Advertisements are described as solicitations to buyers by sellers for offers by offering bids or inviting them to make an offer. Not all advertisements are made to make an offer. It has been stated that an advertisement will be presumed as an offer where the advertisement has express language and all the terms are fixed, nothing left open for negotiation. In the advertisement, BB states that his design fee is $2500 including installation and equipment costs. After LL makes a counteroffer, BB sticks to the original offer by stating that LL should make a design fee down payment of $1250. This clearly shows that the price of services offered by BB was fixed and not up for negotiation even in terms of a counter offer.
The UCC laws governing the sale of goods have stated the requirements to be met when making an advertisement that it must be clear, with fixed terms and limitation in numbers. Bobby Brilliant’s (BB) advertisement can be said to have met the requirements needed because he clearly described his work which involves designing and installing the perfect lighting system in one’s home. BB also stated his services were at a fee of $2500 including installation and equipment. The terms of the contract were unambiguous though it has been noted that unambiguous terms do not manifest mutual assent from both parties. The terms of the agreement made by BB can also be said to be reasonable and made in good faith.
The UCC laws on the Sale of Goods states that part performance by a party may remove uncertainty and establish that an enforceable contract was formed. When this is applied to the case scenario, we can reasonably note that no enforceable contract was formed between BB, the lighting designer and LL, the art consultant. This is because; in as much as LL had expressly shown interest in the services offered by BB, she did not make any down payment as per the terms of the agreement. BB would have started working on LL’s home gallery space after she paid the deposit which would have expressly shown her interest in enforcing the terms. The Manifestation of Mutual Assent in the UCC laws on the Sale of Goods on Section 18 state that each party should make a promise or begin to render a performance. In this case, LL made a promise by stating that she will pay $1500 for the design work and also begun the process to render performance by attaching pictures of her home gallery space.
One means of acceptance of a contract is by performance. Section 54 of the UCC laws on the sale of goods states that where offer invites acceptance by performance, no notification is necessary unless it is requested for in the offer. The agreement between LL and BB can be concluded as not sufficing an agreement. When the advertisement was made by BB, it was an invitation for someone to make an offer and LL showed interest by sending her home gallery space and committing to pay an amount that was not stated by BB. We can reasonably conclude that LL impliedly rejected the terms of the offer by failing to pay the amount stated by BB. The was no agreement that could be enforced as a contract.
QUESTION 2
LL later apologized and sent the down payment fee of $1250 to BB showing her part performance in the contract. The terms of the agreement stated that upon receiving the down payment, BB was supposed to work on the interior design of LL’s home. LL requested that the work had to be completed by December 22 owing to an online holiday art auction that she was planning to host from her home gallery space.
The UCC law on the Sale of Goods has provided for the concept of Anticipatory Repudiation that allows one party to notify the other party before the time for performance as earlier on agreed. Section 250 and 251 of the same law provides that the notification should be clear, overt and unequivocal. In the case scenario given, BB fails to respond to LL’s question on whether he will be able to perform his contractual obligations by 22nd December. Instead, BB shows up on 23rd December and performs substandard work. This can be concluded to be a breach of contractual agreement on BB’s part. This is because BB did not inform LL that he will not be able to perform the work by the date agreed by the parties. He showed up a day late with no remorse or reasonable explanation as to why he had failed to perform his contractual obligation on the agreed date.
A material breach of a contractual obligation relieves the non-breaching party of their responsibilities under the contract as was discussed in the case of Lane Enterprises v L.E. Poster. This, therefore, means that LL was relieved from her obligation to pay the other remaining half of the amount because BB had breached his obligation under the contract by showing up to light her house at a later date without prior warning or notification.
Section 241 of the UCC laws on the Sale of Goods states the various factors to be considered in the event of a material breach. It includes the extent to which the injured party will be deprived of the benefit which he or she reasonably expected. It is reasonably appropriate to argue that LL was greatly inconvenienced because she had planned to host an online holiday auction over zoom from her home gallery space. By 22nd December, BB had not performed his contractual obligations that involved the installation of lighting in her home. She had greatly depended on the lighting to showcase her art through her phone. It can be concluded that LL depended on BB’s contractual agreement to her detriment because she had to conduct the online business work without the needed proper lighting.
Another factor to be considered is the extent to which the behaviour of the party failing to perform comports with standards of good faith and fair dealing. Section 205 of the UCC laws on the Sale of Goods provide for the duty of good faith and fair dealing. It provides that every contract imposes on each party a duty of good faith and fair dealing in its performance and enforcement. On the other hand Section, 203 of the same explains good faith to mean honesty in fact and the observance of reasonable standards of fair dealing in the trade. From the contractual dealing between LL and BB, it is fair to say that LL agreed to the terms of the contract in good faith after BB affirmed that he is a lighting expert with experience. BB promised to deliver an excellent job by claiming that he is a pro. LL, therefore, agreed to the terms of the contract with the expectation of an excellent job and an overall fair dealing.
It is also important to look at the extent to which the injured party can be adequately compensated for the part of that benefit of which he or she will be deprived. This means that in calculating compensation for LL, she will only be compensated the amount she had earlier paid as the deposit fee for the lighting service which amounted to $1250. This is subject to any exception that the court may deem necessary to include as part of her compensation in a bid to restore her to her previous pre-contractual position. For example, the court may consider the fact that LL incurred losses when her fuse blew and short-circuited the whole house owing to the poor lighting services offered by BB, therefore, compensating her for the same aside from her down payment fees.
What is the likelihood that the party failing to perform or to offer to perform will cure his failure? This should be considered when taking account of all circumstances including any reasonable assurance. BB fails to cure his failure to perform. This is seen when he arrives on the 23rd of December, contrary to the prior agreement. After installing the lighting system, the fuse blew and short-circuited LL’s entire home. LL could not also fail to notice that the lighting had made all the art she wished to sell look completely green when she displayed them over zoom for her auction event. BB did not cure his failure to perform. He assured LL that the work would be completed by 22nd December and failed to perform by that agreed date. He also assured LL that he was an expert with experience, therefore, implying that he was to deliver quality services; this turned out not to be the case because BB showed up late and rendered poor quality services.
I don’t think the court will enforce the contract due to the breaches conducted by the other party. It is clear that BB is not an expert as he had earlier imposed therefore ordering him to perform his obligations does not guarantee quality work. The court is likely to offer compensation to LL for the losses she has incurred by ordering BB to return the down payment and incur liability for the fuse break that took place due to his poor quality services.
QUESTION 3
This part of the question seeks to defend BB, not disputing the fact that he had indeed breached his contractual obligation. The first defence that can be applied in BB’s case is the Economic Duress that has been provided for in Section 175 of the UCC laws on the Sale of Goods. Duress makes a contract voidable by the victim if a party’s manifestation of assent is induced by one who is not a party to the transaction unless the other party to the transaction in good faith and without reason to know of the duress either gives value or relies materially on the transaction.
In the factual case scenario given, LL’s business was almost destroyed by the pandemic closing all his clients’ art gallery. Its economic difficulties induced BB to make an opening for an offer through his advertisements. He lacked any other option to uplift and maintain his business. LL was well aware of the fact therefore agreed to the agreement having in mind the tough economic times that had been brought by the pandemic. She, therefore, understood that the offered services to be rendered could not be of high value because the lighting and designing businesses were on the verge of losing all their clients. To prove economic duress in a claim, it can be proved that ordinary legal remedies were not adequate, that the threatened party cannot reasonably obtain performance unless the other party agrees to further demand and that the threatened party cannot reasonably obtain performance from an alternative source. . This is because the pandemic caused a lot of economic difficulties. After all, a large number of jobs were negatively affected. BB’s advertisement to offer lighting services was an act of last resort to make sure that he’s business would not incur losses to the point of closure.
The UCC laws on the Sale of Goods presents the concept of undue influence under Section 177, where it explains that the concept involves unfair persuasion of a party who is under the domination of the person exercising the persuasion or who by the relation between them is justified in assuming that the person will not act in a manner that is inconsistent with his welfare. Such a contract is voidable by the victim. LL has an undisputed influence in the art gallery market. She threatens to tarnish BB’s name in the art gallery market by referring to him as a bad designer lest she is given a discount. In this case, BB acted under the undue influence because he was well aware of the negative impacts that could befall him if he failed to offer the demanded discount. This was an act of unfair persuasion of BB by LL who was well aware of her influence in the art gallery market and failure to give the discount would eventually lead to BB losing his position in the market and therefore surpassed by his brother. Undue influence makes the contractual agreement between the two voidable by BB who is the victim in this case.
A contract is said to be unconscionable if has the aspect of unfair bargaining and unfair substantive terms as part of the agreement. LL is said to have written several tweets that expressly showed her intention to run out BB’s art gallery business in favour of his brother. This brings out the aspect of unfair bargaining because LL had previously shown her intention to put to an end of BB’s business. The unfair bargaining term in the contractual agreement is the fact that LL demands a discount from BB and failure to which she will make sure BB’s business will get a bad review, therefore, reducing his clients in the market.
The defence explained above justifies BB’s breach of the contractual agreement. It can be reasonably concluded that the contract is voidable by BB.
QUESTION 4
As a legal consultant to the Illinois General Assembly’s Committee on the Reform of Commercial Law, I do not agree with the effort to get rid of the equitable claim of estoppel. Section 90 of the UCC laws on the Sale of Goods describes promissory estoppel as reasonably inducing action or forbearance. The law on promissory estoppel can be said to be very useful in a contractual agreement.
First, promissory estoppel can be used as a shield in considering a substitute. This concept estops breaching parties from arguing that there was no consideration. Instead, promissory estoppel fills in for consideration therefore damages are awarded as though there is a contract. The injured party is therefore expected to get full damages subject to damages limitation. Promissory estoppel is used as a shield by injured victims in a contract to compel the breaching party to award damages without arguing the absence of consideration. Promissory estoppel can also be used as a sword in terms of its stand-alone cause of action in an equitable claim. This concept stops someone from getting out of an obligation by stating that one cannot get a full expectation of damages because there is no contract. This means that someone cannot claim that they will not perform their contractual obligation because there was no enforceable contract. The principle mandates for payment of damages. It, therefore, works as a shield to detrimental reliance.
Charitable subscriptions rely on the doctrine of promissory estoppel and involve contribution to funds and institutions. When an organization promises to contribute towards a charitable organization, the promise is binding under Section 90 (2)(1) of the UCC laws on the Sale of Goods. It explains that promissory estoppel binds the promisor to the promise made even without proof that the promise induced action or forbearance. It ensures that the promises made to charitable organizations are taken seriously because it is binding and the breaching party is estopped from making excuses for their contractual part of the agreement. Therefore someone who promises to contribute to a charitable organization stands by his or her word up to the time the contribution will be discharged. The remedy granted for breach of the doctrine of estoppel may be limited as justice requires.
Efforts to get rid of the doctrine of promissory estoppel will lead to non-binding promises made by the promisor. This, therefore, means that parties to a contract will not perform their contractual obligations when slight excuses are made. This will be the detriment of the injured party. When a party makes a promise and the other one relies on it to their detriment, it is only fair that the injured party be awarded damages. The doctrine of promissory estoppel ensures that that party that makes promises stay true to their words.
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