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Question

In March 2021, Brittany started a business as an independent website designer. To get her business going with new clients, her brother Brick contracted to gave her $50,000 to update his retail business website. At the same time, her friend Brad a stockbroker, asked her to update his database, and also contracted to gave to her $25,000.

Within a few weeks, Brittany had completed the two projects but was not paid. By that time, her design business had become a huge success with several new additional clients. When Brick and Brad discovered that fact, they both felt that they should not be asked to pay for the work they had commissioned. Brick said he would not pay the $50,000 because, he had only offered the work to help his sister when she started the company, but now she is quite successful. Brad indicated as well that he would not pay anything either, because he had only gave to her the job to update his database on the basis of their friendship.

Advise Brittany as to whether she can enforce her contract with Brick and Brad respectively.

Answer 1

Below I itemize the issues that leap out from the fact pattern. Remember that each and every issue, law (rule), application of law to facts, and conclusion are “Maybe” Issues-Laws-Applications- and Conclusions. Were it otherwise (were everything “black letter”), we could rid ourselves of many lawyers, judges, and courthouses. See Getting to Maybe: How to Excel on Law School Exams by Fishl and Paul (inexpensive on Amazon).

Statute of Frauds:

(1) Are the Brittany/Brick and Brittany/Brad contracts in writing or verbal?

(1a) If verbal, do the Brittany/Brick and Brittany/Brad contracts violate the Statute of Frauds?

(1b) What is the UCC “predominant purpose” of the formal contracts? The sale of upgraded computer equipment or coding/data processing services? If the former, the UCC governs- but the Brittany/Brick and Brittany/Brad contracts satisfy the UCC Statute of Frauds since the contract prices are far greater than $500.00. That being said, it appears that the Brittany/Brick and Brittany/Brad contracts are service contracts and therefore verbal understandings are permissible. But individual states have enacted other Statutes of Frauds which conceivably could apply.

(1c) Consider whether the Statute of Frauds exception for contracts that can be completed within a year might apply. The fact pattern does not address “Time” nor does the fact pattern reference a “Time is of the Essence” clause. Where no “Time for Performance” is included in the contract, at common law judges (or juries) will determine a “reasonable time”. Regarding the “one year” exception to the Statute of Frauds [SOF] (not present here), do not confuse this exception to the SOF with the agreed “Term” of a contract. Taken to an extreme, a contractor may have 10 years to build a house but it can easily be built within one year. The construction contract satisfies the SOF.

(1d) If you draw a blank on the “F” in SOF, remember that “F” stands for “Fraud” and the word “fraud” is used to highlight that it is a “best practice” to reduce contracts to writing to avoid the perjury (fraud on the court) that can too easily arise if the parties are disputing the terms of a verbal contract (who said what to whom).

Consideration:

(2) Is there supporting consideration and, if so, is the consideration adequate and sufficient? The best way of thinking about “consideration” is to look to whether each party to a contract has “changed position” or promises to “change position” in the future. A “Bargained for Exchange”. Brittany has IT skills but not $50,000 while Brick has $50,000.00 (and Brad $25,000) but no computer skills. Brad and Brick promise to swap positions with Brittany…. Brittany expects she will soon have $50,000 and $25,000 (per the Brad and Brick contracts) once she “reciprocates” by providing the promised IT services.

(2a) Brad claims that he entered into a contract with Brittany based on friendship. “Friendship” may have been one (one of perhaps many) motives for obtaining Brittany’s services, but the consideration is based, according to the unambiguous contract terms, on an exchange of services in return for compensation.

Offer and Acceptance:

(3) Both are clearly present. Learning Aid- When you address “Acceptance” in an Essay/MEE Exam think “Mirror Image Acceptance”. But if you are dealing with the UCC the use of the words “mirror image” may be misleading, particularly if the UCC “Battle of the Forms” is front and center.

The Parol Evidence Rule:

(4) The word “Parol” is a misnomer. It can apply, on a case by case basis, to any pre-contract communication(s) (written, verbal, or smoke signals- typically antecedent negotiations).

(4a) The word “Evidence” can be misleading. The Parol Evidence Rule is a substantive contract doctrine and not a rule of evidence. Interestingly- as an aside- in England the Parol Evidence Rule is a rule of evidence.

(4b) The Parol Evidence Rule only applies to antecedent communications that “vary” (the legal jargon), i.e. modify or contradict, the terms of the contract in question. It does not apply if pre-contract communications are used to explain ambiguities in the formal contract, define highly technical terms in the primary contract, supply omitted terms, etc. In other words, pre-contract communications can be used for any legitimate purpose so long as a contracting party is not urging that the contract in issue be changed based on those communications. And, of course, proof of fraud in the inducement based on pre-contract communications is never barred under the Rule.

(4c) The Parol Evidence Rule only applies to antecedent or later concurrent communications at the exact time of contracting. Post-contract communications are not within the Rule. Not even post-contract verbal communications (or course of conduct)- evidencing a mutual intent to change very critical contract terms- are barred.

(4d) Many legal terms contrast and compare with the Parol Evidence Rule such as “integrated or integration”, the “four corner’s doctrine”, “merger”, or “completeness”.

Condition Precedent:

(5) Brick and Brad’s desire to be released from the contract since Brittany is successful with her venture, may be viewed, generically, as a condition precedent to payment. There is no such express term in the Brad/Brick contracts nor any other evidence that Brittany ever agreed to such a term.

Rescission and Restoration:

(6) A non-breaching party may file a suit for rescission in the event of a material breach by the other party in privity…. in essence asking the court to restore the parties to status quo (before the contract existed). This remedy is meaningless as far as Brittany is concerned. Her IT services cannot be restored/returned to her. The IT services have already been performed.

Illusory Clauses:

(7) Brick and Brad’s “desires” to withhold payment are so subjective as to be standardless (immeasurable). Six different juries would come to 6 different conclusions. If an illusory clause is at the core of a contract, the entire contract, if incapable of reformation (correction), may be deemed “illusory”. In addition, Brittany’s “degree of success” is anybody’s guess.

(7a) The fact pattern states that both Brick and Brad “felt” that they should not have to honor their contracts. Contracts are expected to be objective, not subjective, manifestations of intent. A “feeling” is entirely subjective and therefore never enforceable in a contract dispute.

Promissory Estoppel:

(8) If the Brittany/Brad and Brittany/Brick contracts fail- for reasons that are not apparent- a claim for relief (a cause of action) for Promissory Estoppel might lie: A promise made by Party A to Party B which Party A hopes B will rely upon and, as hoped, Party B detrimentally relies.

Unjust Enrichment:

(9) If the Brittany/Brick/Brad contracts failed- for reasons that are not apparent- then Brick and Brad are unjustly enriched since they received services without having to pay for those services. A count for Unjust Enrichment is appropriate. Unjust Enrichment is a form of Quasi-Contract.

Damages or Specific Performance:

(10) A non-breaching party is entitled to damages based on a material (not insubstantial) breach by the other party. Here a final judgment for money damages is a sufficient remedy. A request by Brittany for Specific Performance (mandatorily enjoining Brad and Brick to pay the contract amounts) will not lie since equitable remedies, like Specific Performance, are only available if the non-breaching party has “no adequate remedy at law”. Money judgments in favor of Brittany and against Brick and Brad are adequate remedies at law under the circumstances.

Study Tips and Tricks:

(1) As with most essay exams, much of the Brittany/Brad/Brick fact pattern is irrelevant, fluff, or deadly red-herrings (there be dragons!). For example, the March 2021 contract date is irrelevant, as is the fact that Brad is a stockbroker. The word “friendship” is a red-herring. Under the facts, the consideration supporting the formal contracts is compensation for services and not friendship. Perhaps these words are included to take you down a blind alley as you spend precious time trying to determine what those words might have to do with anything and just end up getting needlessly confused.

(2) Many (most) Law Students and Bar Applicants have considerable difficulties in ascertaining a particular “issue”, in large measure because they cannot define the word “issue”. Instead of thinking that you must “issue spot” do essentially the same thing by looking for “trigger words”, i.e. words and terms in the fact pattern that trigger legal consequences (the words or terms are “legally consequential”). Highlight those words. For example, if a torts essay question mentions “Dynamite” that- without more- triggers the possibility that the question will deal with the Tort of Strict Liability (Ultrahazardous Products). The word “Dynamite” does not, without more, trigger the terms Simple Negligence, Gross Negligence, or Intentional Tort.