HOMEWORK ONE-Contract Exercise (Chapters 7-11).

Business & Finance
Price: $5 USD

Question description

As a new sales representative for Madmel Enterprises, you take a long time customer out to dinner and drinks.  Before dinner is over, but after sharing a couple of rounds of top-shelf tequila, you have shaken hands on a deal to sell the customer nearly a one and a half-million dollars worth of industrial equipment.  Madmel Enterprises is the only supplier of this industrial equipment.  You have orally agreed on the essential terms of the deal such as price, quantity, delivery, etc.  In writing up the formal contract the next morning, you discover that you miscalculated the equipment’s price.  Your error could cost Madmel Enterprises $120,000. 

You telephoned your customer to explain the situation.  The customer insists we have a deal and if you do not go through with the deal, the customer will sue Madmel Enterprises for specific performance and other damages.  The customer says that without the industrial equipment the company’s operations will be severely impacted and it will cost thousands of dollars a day in lost profits.

You go to your boss and explain the situation.  Your boss is a novice in contract law and asks you to explain in writing whether the deal is enforceable, what specific contractual issues will likely arise in the dispute and if Madmel can even get specific performance or other damages assuming they were successful in a lawsuit. 

Prepare a memo for your boss.  (Be sure to discuss the requirements of a valid contract, any possible defenses, validity of customer’s demand for specific performance or other damages, and whether business considerations may warrant going through with the deal even if the deal is not a contract or unenforceable.)  Be detailed and use the law explaining and defining key terms from the text on contracts to support your analysis.

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