Contract Formation and Remedies:

Question

Read the scenario and respond according to the prompts below.

Mary tells Liam and Mike that she will give them $2,500 if they paint her house. Mary's statements are overheard by Jane, Mary's neighbor. The next day while Mary is at work, she sees an ad by Bill's painting that states "Bill's will paint your house for $1,500, satisfaction guaranteed or your money back." Mary calls' Bill's and arranges to have her house painted. When Mary returns home, she finds Liam and Mike hard at work and her house half painted. She screams at them to stop and orders them off her property. Bill's workers come the next day and paint the house. Liam and Mike come to you for advice because Mary refuses to pay them.

Write a formal paper that discusses issues that you identify in the scenario. (note: unlike prior assignments, in this Week 3 paper, you must identify the issues. Remember, this assignment is 26% of your course grade)

Some items to consider:
What claims might Liam and Mike have against Mary?
What defenses might Mary have?
If Liam and Mike have valid claims, what damages might they recover?

 

I am trying to figure out what contract formation this question would be.

Answer 1

I am not a lawyer nor a contracts specialist (although I did one time join the NCMA) and do not give legal or contract advice.  However, you should have answers to these points:

  -  Mary made a verbal agreement (with a scope of work and specific remuneration) with Liam and Mike.

  -  The verbal agreement was not written; it was not signed; it did not have witness' signatures; it was not notarized.

  -  There was an informal witness who overheard the verbal agreement (and, if she testifies, it reduces the "he said - she said" character of the dispute.

  -  It is Mary's property and she has the right to stop work on any contract (and thus absorb any penalties) at will.

  -  Mary's arrangements with Bill's, although very two-faced, and Bill's work to complete painting the house do not enter into the dispute that Liam and Mike have with Mary.  Their claim is that they invested time and materials in response to Mary's agreement (overheard by Jane) and Mary refuses to pay them for that.  Bill's lower price is also irrelevant as are any T's and C's (like money-back guarantee).

  -  Mary also had the right to scream at Liam and Mike, but she risks lawsuit if there is defamation or bodily injury or ... (I hope Jane didn't overhear this tantrum).

 

There is much to consider about "good faith" agreements, written agreements, witnesses, and granting access to property (can Liam and Mike just start painting Mary's house when they are ready?).

 

Note:  there may considerable differences in applicable laws also (if this is not in the U.S., good luck!  In the U.S., States have different laws).