Foodmart Case Case Study

Abstract

In this paper Team A will evaluate four different scenarios involving a national grocery store chain, Foodmart, Inc., and two of its employees Jeremy Atwater and Brian McDonald. The first scenario will touch on a contract dispute between Foodmart and Masterpiece Construction and whether the contract between the two was breached. The second scenario concerns 17- year old Jeremy Atwater, who entered a contract to buy a car. After six months, Jeremy brought the car back requesting a refund. This scenario looks at whether the contract that Jeremy entered is valid. The third scenario looks at another Foodmart employee, Brian McDonald, and whether he entered a verbal contract with a friend, and fellow train collector, when he promised that in two years when he retired he would only sell to his friend. However, two years later Brian sold the train set to a neighbor. The last scenario looks at Foodmart and an online customer. The customer sues Foodmart stating he would not sell him a discontinued product at the reduced price. Foodmart counters that the customer signed an online contract, and they have done nothing wrong.

Foodmart Inc.

Contracts are binding agreements made by two or more parties. In order for a contract to be enforceable it must be legally valid, and it must consist of an offer, acceptance, and consideration. If these components are missing the contract will not stand-up in a court of law. The following scenarios will show how different laws have been applied to the contracts and conflicts.

Contract Validity

This scenario requires us to determine whether a contract was valid and established, whether Masterpiece had the option to subcontract or not (this typically depends on who presented the contract and what was contained therein), and whether the contract was breached. A contract was obviously valid and established in this particular scenario as the criteria have been met. The questions in this scenario begin with whether or not Masterpiece had the right to delegate the work. This is really contingent upon who drew up the contract. That information aside, Masterpiece still had a responsibility to inform Foodmart that they would be subcontracting the work out. They did not do this and as a result are in breach of the contract.

The final question is whether Masterpiece had the option to discharge the contract because of commercial impracticability or not. In this case they do not. The contract length was 6-months, the work could be completed in that time, and Masterpiece could not meet that time frame because they chose to take on more work than they could handle. Masterpiece will only come out ahead on the specific performance area of this scenario. The 13th Amendment of the United States Constitution would prevent any sort of "forced labor" ruling under which they would be required to finish the job.

An injunction is the final point of order. Foodmart is obviously unhappy with the work provided by Build Them to Fall Construction. To attain this injunction Foodmart simply needs to show that the work by Build Them to Fall interfered with their business, increased the costs of renovation, or increased the costs mitigating damages and that they refused to stop the work. Foodmart will win an injunction and Build Them to Fall will be forced to stop work.

Contract Legality

A contract is legally enforceable between two or more people but minors lack the legal capacity to enter contracts (Radcliff & Brinson, 1999), and in most states the legal age is 18 for entering contracts. The first and most identifiable problem is that Jeremy Atwater is a minor and cannot enter a valid contract because he is 17; therefore, there is no contract between Jeremy Atwater and Smooth Sales Used Cars. Furthermore, from a legal and ethical perspective Smooth Sales should take back Jeremy's car and issue a refund because it was Smooth Sales responsibility to determine whether or not Jeremy was of mature age before entering a contract.

Jeremy has already paid six months of payments along with a down payment; therefore, one possible outcome is that Smooth Sales could cancel the contract, take back the car, and pay Jeremy the money he paid out for the car as Jeremy is requesting. Second option is that Smooth Sales return the money to Jeremy and simply take back the car. Third, Smooth Sales could take the car back and work out a settlement by charging Jeremy for using the car for six months but return the down payment. Last, Jeremy could be sued by Smooth Sales to take the car and insist that Jeremy or legal guardians pay for the car according to contract signed.

Smooth Sales is required to return the money to Jeremy if legal remedies are followed because there is no valid contract in place. The same is true from an equitable remedies perspective but the amount of money may change if Smooth Sales charges for the six months the car was used by Jeremy. According to law, Smooth Sales is not protected because Jeremy was never asked for his age.

Promissory Estoppels

Harry cannot sue Brian for breach of contract. Depending on the specifics of the contract, a breach can only occur when a party fails to perform on time, does not perform in accordance with the terms of the agreement, or does not perform at all (Cheeseman, 2010). A business contract creates certain