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9–4. Types of Contracts
Burger Baby restaurants engaged Air Advertising
to fly an advertisement above the Connecticut beaches. The advertisement
offered $1,000 to any person who could swim from the Connecticut beaches to
Long Island in less than a day. At 10:00 A.M. on October 10, Air Advertising’s
pilot flew a sign above the Connecticut beaches that read: “Swim across the
Sound and Burger Baby pays $1,000.” On seeing the sign, Davison dived in.
About four hours later, when he was about halfway across the Sound, Air
Advertising flew another sign over the Sound that read: “Burger Baby
revokes.” Davison completed the swim in another six hours. Is there a contract between Davison and Burger Baby? Can
Davison recover anything? Why or why not?
Evelyn Kowalchuk, an eighty-eight-year old widow,
and her son, Peter, put their savings into accounts managed by Matthew
Stroup. Later, they initiated an arbitration proceeding before the National Association
of Securities Dealers (NASD), asserting that Stroup fraudulently or
negligently handled their accounts. They asked for an award of $832,000.
After the hearing, but before a decision was rendered, Stroup offered to pay
the Kowalchuks $285,000, and they e-mailed their acceptance. Stroup signed a
settlement agreement and faxed it to the Kowalchuks for their signatures. Meanwhile,
the NASD issued an award in the Kowalchuks’ favor for $88,788. Stroup
immediately told them that he was withdrawing his settlement “offer.” When
Stroup did not pay according to its terms, the Kowalchuks filed a suit in a
New York state court against him for breach of contract. Did these parties have a contract? Why or why not? [Kowalchuk v. Stroup, 873 N.Y.S.2d 43 (N.Y.A.D.
1 Dept. 2009)]
10–9. A QUESTION OF ETHICS: Remedies.
In 2004, Tamara Cohen, a real estate
broker, began showing property in Manhattan to Steven Galistinos, who
represented comedian Jerry Seinfeld and his wife, Jessica. According to Cohen,
she told Galistinos that her commission would be 5 or 6 percent, and he agreed.
According to Galistinos, there was no such agreement. Cohen spoke with
Maximillan Sanchez, another broker, about a townhouse owned by Ray and Harriet
Mayeri. According to Cohen, Sanchez said that the commission would be 6
percent, which they agreed to split equally. Sanchez later acknowledged that they
had agreed to split the fee, but claimed that they had not discussed a specific
amount. On a Friday in February 2005, Cohen showed the townhouse to Jessica.
According to Cohen, she told Jessica that the commission would be 6 percent,
with the Seinfeld’s paying half, and Jessica agreed. According to Jessica,
there was no such conversation. Later that day, Galistinos asked Cohen to
arrange for the Seinfeld’s to see the premises again. Cohen told Galistinos
that her religious beliefs prevented her from showing property on Friday
evenings or Saturdays before sundown. She suggested the following Monday or
Tuesday, but Galistinos said that Jerry would not be available and asked her to
contact Carolyn Liebling, Jerry’s business manager. Cohen left Liebling a
message. Over the weekend, the Seinfeld’s toured the building on their own and
agreed to buy the property for $3.95 million. Despite repeated attempts, they were
unable to contact Cohen. [Cohen v. Seinfeld, 15
Misc.3d1118 (A), 839 N.Y.S.2d 432 (Sup. 2007)](a) The
contract between the Seinfeld’s and the Mayeris stated that the sellers would
pay Sanchez’s fee and the “buyers will pay buyer’s real estate broker’s fees.” The
Mayeris paid Sanchez $118,500, which is 3 percent of $3.95 million. The Seinfeld’s
refused to pay Cohen. She filed a suit in a New York state court against them,
asserting, among other things, breach of contract. Should the court order the Seinfeld’s
to pay Cohen? If so, is she entitled to a full commission even though she was
not available to show the townhouse when the Seinfeld’s wanted to see it?