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Running Header: DISCUSSION BOARD 1

Discussion Board One Jarrett Davis BUSI 561

DISCUSSION BOARD 1 In this paper, an effort is made to understand a contract dispute between merchants. This work includes an evaluation of the legal position of both parties involved in the dispute. In this case, the buyer (Don) wants the contract in question upheld. Assuming he ignored the issue from a biblical perspective, he could point to the Uniform Commercial Code (UCC) and article 2-716. He could argue that the goods exchanged in this contract are unique, and he is entitled to the specific performance of the contract (Cornell article 2, 2011). Furthermore, he may feel that he is owed restitution based on breach of contract by the seller. The seller in this scenario may first attempt to resolve this without legal action. He could rely on his faith and biblical teachings, to show Don the errors of his ways. If he must rely on legal relief, he could argue the contract unenforceable due to fraud and inept execution. In this scenario, the business relationship is best suited to be severed. The common law duty to perform in good faith Good faith performance is an implied agreement in nearly every contract in American common law jurisdictions (Burton, 1980). In the contract in question, Don is the promisee, upholding an expectation of receiving the terms agreed upon in the contract. The duty to perform in good faith is an issue because Don addressed performance of his supplier in the contract. In this manner, he may secure supply, price, and control of the benefits reaped by his supplier. From a legal standpoint, Don has acted in bad faith, because his actions were taken freeze or recapture previous supply availability and pricing. Minors Capacity to contract Don received the signature of a seventeen year old minor on the contract he hopes to enforce. From a legal position, minors have a limited ability to contract (West.net, 2012). The contract between Don and the seventeen year old employee is voidable at the minors discretion. This option exists because minors need protection from their own immature judgment and those who wish to take advantage of them.

DISCUSSION BOARD 1 Fraud in the execution of a contract Don may be found guilty of fraud in the execution of a contract. The seller may argue this point, claiming themselves defrauded, and that they did not intend to agree to the contract in question (Ashcroft & Ashcroft, 2008). Furthermore, the seller could argue that Don is guilty of active fraud, by express misrepresentation. Don made a false statement when advising the minor the document he had signed was simply a formality. He had a disregard for the truth and encouraged the minor to act. The minor believed Dons statements about the contract being nothing more than a formality. For these reasons, Dons contract could be declared void due to active fraud. An employees capacity to bind by contract Businesses may agree to contracts through their agents, or employees (Findlaw, 1999). The ability of an employee to bind his/her company to contract is a matter of agency law. When the permissions of another party are in question, one should always ask that the contract be reviewed or signed by the company president of your supply partner. Even if Don thought the seventeen year old minor was of age, he should have checked on his ability to agree to a contract. Section 2-306 of the uniform commercial code A lawful agreement between the seller and buyer creates an obligation by the seller to supply goods and the seller to promote the sales of goods. However, no unreasonable demands may be made in comparison to previous output (Cornell-seller, 2012). Dons demands would be found to be in bad faith, and without reasonable fairness. Implied contracts Implied contracts are legally enforceable agreements drawn from past conduct and assumed intentions (Business Dictionary, 2012). A contract is implied when a party receives goods under

DISCUSSION BOARD 1 circumstances where it is understood the goods are not a gift. The accepting party is legally obligated to pay fair value for the goods received. Prior to Dons attempt to bind his supplier in a contract, they were operating under an implied contract. Therefore, the seller could demand payment for goods in the same many that had become customary in their relationship. Promissory Estoppel A party attempting to prove a contracts existence must show that the agreement was built with consideration from both parties (Feldman, 2004). Promissory estoppel is meant to protect the plaintiff or promisee from losses due to a contract breached by another party. In many cases a seller will be found in breach of contract, and the buyer will be awarded fair compensation. Don secured a promise from his supplier in an unjust manner. A court of law is unlikely to find an ample amount of consideration on the part of Dons supplier. Don is unlikely to win a legal battle based on the principle of promissory estoppel. Custom and practice between merchants Article 2-201 of the UCC states that for a contract to be enforced it must be signed be the authorized agent of the group refusing to honor the contract (Cornell, 2012). Continued business without objection could be noted by Don in his effort to enforce the contract. The contract will remain unenforceable as the proper agent of the supplier has ten days to object to the contract after being presented with it. Dons fraudulent execution of contract will make it unlikely he can rely on article 2201 of the UCC. Conclusion Don may be fortunate that his supplier is God fearing man who serves a merciful God. The supplier may counsel Don and offer him an opportunity to dispose of the fraudulent contract. In this

DISCUSSION BOARD 1 scenario Don acted in bad faith, and agreed to a contract with a minor that is completely voidable. He secured the contract in a fraudulent manner, from an agent not clearly authorized to sign such a contract. Dons actions are unreasonable under section 2-306 of the UCC, and previous invoices and business records will share what was actually implied between the parties. Promissory estoppel will grant no relief for Don, nor would the merchant customs found at 1-201 of the UCC. Dons actions do not meet the requirements of either piece of litigation. Don would be well advised to accept the mercy of his brother in Christ. For if you forgive men their trespasses, your heavenly Father will also forgive you. 15 But if you do not forgive men their trespasses, neither will your Father forgive your trespasses. (Matthew 6:14-15 NKJV).

DISCUSSION BOARD 1 References Ashcroft J., D., & AshcroftJ.,E, (2008). Law for Business. 16th Ed. Thompson Higher Education. Mason OH. ISBN: 9780324381573. Retrieved from: http://books.google.com/books?id=BHpGALgCs0YC&pg=PA88&lpg=PA88&dq=fraud+in+the+execution+ of+a+contract&source=bl&ots=gzZFlXH6q5&sig=BptcFyydQdnYLTotFxOSlp-aQc&hl=en&sa=X&ei=03d2T9PdAs2p0AHjhqjcDQ&ved=0CB4Q6AEwAA#v=onepage&q=fraud%20in%20th e%20execution%20of%20a%20contract&f=false Burton, S. J. (1980). Breach of Contract and The Common Law Duty to Perform in Good Faith. Harvard Law Review, 94(2), 369. Contract Law Tutorial. Retrieved from: http://www.west.net/~smith/unfairness.htm Contracts Law. Retrieved from: http://library.findlaw.com/1999/Jan/1/241463.html Feldman, S. W. (2004). Promissory Estoppel. Tennessee Bar Journal, 40(12), 24-26. U.C.C. - Article 2 Sales. http://www.law.cornell.edu/ucc/2/article2.htm Implied Contract. Retrieved from: http://www.businessdictionary.com/definition/implied-contract.html

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