Business Law

J H

Business Law and Ethics 5/4/11

Case 1

Hard Body

HB 1

a.

b. The contract between Hard Body and Jerusalem Steel is a bilateral contract. The contract was express and signed by Jerusalem Steel. Jerusalem Steel and Hard Body are binding since it is a valid contract. The signed contract implied agreement and mutual consideration, where Jerusalem Steel promised to deliver 20,000 tons of steel and Hard Body promised to pay for that steel at a 2-year set price. There is also legal purpose/subject matter and legal capacity from both parties.

c. If Hard Body receives no steel, they would have a valid lawsuit against Jerusalem. Hard Body made this specific bargain to protect itself from a possible price rise and relied on the agreement to fulfill their obligations/contracts. A rise in the price of steel is certainly no excuse to walk away from an agreement. In this case, there are issues of offer and acceptance, consideration, and discharge.

d. Hard Body probably can’t force Jerusalem Steel to deliver the steel, but they can probably stop them from delivering it to anyone else. Hard Body is certainly entitled to remedies if it is forced to buy steel at a higher price, which would be the difference between the market price when Hard Body learned of the breach and the contract price, along with any incidental and consequential damages.

HB 2

a. If Hard Body does not receive the steel, it is likely that they can lay off their workers since they agreed to work based on the assumption that Hard Body was going to receive steel at the contract price.

b. Hard Body’s statement about “expecting the job to lost forever” doesn’t exactly create a lifetime employment for Nicole at Hard Body and is more of an opinion than a promise. Hard Body was relying on Jerusalem for her position, and they could probably even terminate her after she had begun working there. Nicole can raise the defense of promissory estoppel because of the fact...