Chapter 18, Problem 11CP

Dozier and his wife, daughter, and grandson lived in the house Dozier owned. At the request of the daughter and grandson, Paschall made some improvements to the house. Dozier did not authorize these, but he knew that the improvements were being made and did not object to them. Paschall sued Dozier for the reasonable value of the improvements, but Dozier argued that he had not made any contract for such improvements.  Moral of the case?  Lessons Learned?

Merrill Lynch employed Post and Maney as account executives. Both men elected to be paid a salary and to participate in the firm’s pension and profit-sharing plans rather than take a straight commission. Thirteen years later, Merrill Lynch terminated the employment of both Post and Maney. Both men began working for a competitor of Merrill Lynch. Merrill Lynch then informed them that all of their rights in the companyfunded pension plan had been forfeited pursuant to a provision of the plan that permitted forfeiture in the event an employee directly or indirectly competed with the firm. Is Merrill Lynch correct in its assertion? Why or why not?

Henrioulle, an unemployed widower with two children, received public assistance in the form of a rent subsidy. He entered into an apartment lease agreement with Marin Ventures that provided “INDEMNIFICATION: Owner shall not be liable for any damage or injury to the tenant, or any other person, or to any property, occurring on the premises, or any part thereof, and Tenant agrees to hold Owner harmless for any claims for damages no matter how caused.” Henrioulle fractured his wrist when he tripped over a rock on a common stairway in the apartment building. At the time of the accident, the landlord had been having difficulty keeping the common areas of the apartment building clean. Will the exculpatory clause effectively bar Henrioulle from recovery? Explain.

El Dorado Tire Company fired Bill Ballard, a sales executive. Ballard had a five-year contract with El Dorado but was fired after only two years of employment. Ballard sued El Dorado for breach of contract. El Dorado claimed that any damages due to breach of the contract should be mitigated because of Ballard’s failure to seek other employment after he was fired. El Dorado did not provide any proof showing the availability of comparable employment. Explain whether El Dorado is correct in its contention.

Mork and Mindy create a for-profit corporation, Mork's House, to provide shelter to homeless and abused women and children. Mork and Mindy are shareholders of the corporation. Zada is also a shareholder in the corporation, along with five others. Douglas manages the day-to-day operations of the corporation. The bylaws of the corporation provide that the corporation is established for the sole purpose of providing shelter, food, and care for homeless and abused women and children and for no other purpose. When the refrigerator in Mork's House stops working, Douglas purchases a new refrigerator from Home Depot and charges it to the corporation. If Zada challenges the purchase as being ultra vires: she will lose, because purchasing the refrigerator is an express power of the corporation. she will lose, because purchasing the refrigerator is an act reasonably necessary to accomplish the goals. she will win, because the bylaws do not address purchases of appliances. she will win, because…

The statute of frauds does NOT cover which of the following contracts? Bridgeby enters into a contract for the sale of her house. Ruelle and Randolph enter into a pre-nuptial agreement. O Quincy accepts Cleo's offer to buy from Cleo her couch for the price of $4,000. Jasper, the executor of the estate of Gabrielle's dead cousin, agrees with Gabrielle that Gabrielle will pay a debt of that estate: Gabrielle will inherit three-fourths of the estate, with the rest going to various charities. O For the price of $599. Millie enters into a contract with a merchant, Reesa, to buy from Reesa some wrenches with an estimated barter value of approximately $620.

Sheila owned an old roadside building that she believed could be easily converted into an antique shop. She talked to her friend Barbara, an antique fancier, and they executed the following written agreement: a. Sheila would supply the building, all utilities, and $100,000 capital for purchasing antiques. b. Barbara would supply $30,000 for purchasing antiques, Sheila would repay her when the business terminated. c. Barbara would manage the shop, make all purchases, and receive a salary of $500 per week plus 5 percent of the gross receipts. d. Fifty percent of the net profits would go into the purchase of new stock. The balance of the net profits would go to Sheila. e. The business would operate under the name “Roadside Antiques.” Business went poorly, and after one year, a debt of $40,000 is owed to Old Fashioned, Inc., the principal supplier of antiques purchased by Barbara in the name of Roadside Antiques. Old Fashioned sues Roadside Antiques, and Sheila and Barbara as partners.…

Raphael, a minority shareholder of the Sample Corporation, claims that the following sales are void and should be annulled. Explain whether Raphael is correct. a. Smith, a director of the Sample Corporation, sells a piece of vacant land to the Sample Corporation for $500,000. The land cost him $200,000. b. Jones, a shareholder of the Sample Corporation, sells a used truck to the Sample Corporation for $8,400, although the truck is worth $6,000.

On August 20, Hildebrand entered into a written contract with the city of Douglasville whereby he was to serve as community development project engineer for three years at an “annual fee” of $19,000. This salary figure could be changed without affecting the other terms of the contract. One of the provisions for termination of the contract was written notice by either party to the other at any time at least ninety days prior to the intended date of termination. The contract listed a substantial number of services and duties Hildebrand was to perform for the city; among the lesser duties were (a) keeping the community development director (Hildebrand’s supervisor) informed at all times of his whereabouts and how he could be contacted and (b) attending meetings at which his presence was requested. Two years later, on September 20, by which time Hildebrand’s fee had risen to $1,915.83 per month, the city fired Hildebrand effective immediately, citing “certain material breaches…of…