ch 12, 13, 14, 24 test 4

Americans with Disabilities Act

ADA prohibits discrimination against employees and job applicants with disabilities.

Third-Party Beneficiary Contracts

An intended beneficiary is a third party to a contract whom the contracting parties intended to benefit directly from their contract. -Promisor: A party to a contract who made the promise that benefits the third party. -Promisee: A party to a contract who owes something to the promisor in exchange for the promise made to the third-party beneficiary. -Creditor beneficiary: A third party who benefits from a contract in which the promisor agrees to pay the promisee's debt. -Donee beneficiary: A third party who benefits from a contract in which a promisor agrees to give a gift to the third party. -Vest: The maturation of rights such that a party can legally act upon the rights. An incidental beneficiary is a third party who unintentionally gains a benefit from a contract between other parties. That is, it was never the conscious objective of the contracting parties to benefit the third party.

ALLAN V. NERSESOVA

SIGNIFICANCE OF THE CASE: The case illustrates how one becomes an intended third-party beneficiary to a contract when the group to which he or she belongs is clearly stated within the contract as receiving benefits from that contract. FACTS: Allan and Koraev both owned condominiums in the same building. Koraev's unit was directly above Allan's. Allan lived in her own unit; Koraev leased his. The leasing of Koraev's unit was managed by Nersesova. Between 2005 and 2007, plumbing problems in Koraev's unit damaged Allan's unit eight times. Allan sued Nersesova and Koraev, among other building executives. The terms of the lawsuit included breach of contract and negligence. All defendants, excluding Koraev and Nersesova, settled with Allan before the trial. The jury found on behalf of Allan for the negligence of both Koraev and Nersesova and, additionally, breach of contract of Koraev. Both parties were found responsible for damages as third parties. However, Koraev moved for judgment notwithstanding the verdict, arguing that there was no contract between her and Koraev that made Allan a third-party beneficiary. The trial court agreed and granted the defendant's motion. The plaintiff appealed. ISSUE: Did the contract between Koraev and the building owners' association (Association) make Allan an intended third-party beneficiary? REASONING: A third party, such as Allan, may sue to enforce a contract as a third-party beneficiary only if the contracting parties entered into the contract directly and primarily for the third party's benefit. There is a presumption against conferring third-party-beneficiary status. The intent to confer a direct benefit upon a third party must be clearly and fully spelled out in the contract. The contract at issue stated, "The Association does hereby publish and declare that the covenants, limitations, and obligations contained herein shall be deemed to . . . be a burden and a benefit to the Association and any person acquiring or owning an interest in the property." It also stated, "Each Owner shall comply strictly with the provisions of the . . . Rules and Regulations . . . of the Association. Failure to comply with any of the same shall be grounds for an action to recover sums due, for damages or injunctive relief or both, and for reimbursement of all attorney's fees incurred in connection therewith, which action shall be maintainable by the Managing Agent or Board of Directors in the name of the Association, in behalf of the Owners or, in a proper case, by an aggrieved owner." Included in the rules is a requirement for a unit owner to repair at his own expense any damage he (or his tenants) may cause to the condominium. The language of the contract clearly and expressly says that the beneficiaries of the contract include owners of condominium units. The rules are set out to protect these owners. Koraev violated the rules that were designed to benefit the owners, including Allan. Allan is therefore an intended third-party beneficiary and consequently entitled to bring a suit to enforce the contract. DECISION AND REMEDY: The court concluded that the governing documents made Allan an intended beneficiary of the contract between Koraev and the Association and granted her authority to bring suit for Koraev's breach of those documents. Accordingly, the appellate concludes the trial court erred by granting Koraev's motion for judgment notwithstanding the verdict on Allan's claim for breach of contract and reinstated the jury verdict in favor of the plaintiff.

DONALD BALDWIN, COMPLAINANT V. ANTHONY FOXX, SECRETARY OF DEPT. OF TRANSPORTATION (FAA), AGENCY

SIGNIFICANCE OF THE CASE: This was the first time that the EEOC stated that a claim for sexual orientation discrimination is, by definition, also a claim for sex discrimination. Since that 2015 agency decision, several courts have taken up the same issue. A 2017 case in the federal Seventh Circuit Court of Appeals determined that discrimination based on sex, under Title VII, includes sexual orientation discrimination. Hively v. Ivy Tech Community College of Indiana reverses decades of precedent.14 In that case, an adjunct community college professor alleged that she was denied a permanent position on the faculty because she was a lesbian. She sued under Title VII, arguing that discrimination based on "sex" includes sexual orientation discrimination. The trial court dismissed her case with prejudice. On appeal, the Seventh Circuit reinstated the case. The majority opinion contains three basic argumentsPage 535 why sex discrimination under Title VII should include sexual orientation discrimination: 1. Discrimination against a lesbian is necessarily discrimination against a woman. 2. Title VII case precedent protects individuals who do not adhere to gender norms (see Price Waterhouse v. Hopkins, 409 U.S. 228 (1989)). 3. Title VII case precedent protects persons from discrimination based on their association with those of other races (see Loving v. Virginia, 388 U.S. 1 (1967)), therefore Title VII should also protect persons from discrimination based on the sex of the associate. Other federal circuit courts have come to the opposite conclusion. Ultimately, this matter will either be decided by Congress, or more likely, the U.S. Supreme Court. FACTS: Donald Baldwin worked as a Supervisory Air Traffic Control Specialist at the Agency's Southern Region in Miami, Florida. When he learned that he was not selected for a permanent position as a Front Line Manager (FLM) at the Miami tower, he filed an Equal Employment Opportunity (EEO) complaint alleging discrimination based on gender (male) and sexual orientation discrimination. The Agency accepted the complaint for investigation. Baldwin alleged that he was not selected because he is gay. He alleged that his supervisor, who was involved in the selection process for the permanent position, made several negative comments about Baldwin's sexual orientation. For example, Baldwin stated that in May 2011, when he mentioned that he and his partner had attended Mardi Gras in New Orleans, the supervisor said, "We don't need to hear about that gay stuff." He also alleged that the supervisor told him on a number of occasions that he was "a distraction in the radar room" when his participation in conversations included mention of his male partner. ISSUE: The agency examined whether the Title VII requirement that personnel actions affecting federal employees be made free from any discrimination based on "sex" includes discrimination based on sexual orientation. REASONING: In its decision, the Agency did not address the merits of Baldwin's claim. Instead, the Agency dismissed the complaint on the grounds that it had not been raised in a timely fashion with an EEO Counselor, as required by EEOC regulations. Additionally, Baldwin was notified that pursuant to the "Secretary's Policy on Sexual Orientation" and the "Departmental Office of Civil Rights' March 7, 1998 Procedures for Complaints of Discrimination based on Sexual Orientation," the "sexual orientation portion of the claim is appealable to the Agency and the portion of the claim involving reprisal is appealable to the EEOC." Baldwin appealed the Agency's decision. Baldwin's complaint makes it clear that he believes that he was denied a permanent position because of his sexual orientation. The Agency erred in its decision to process this claim only under its internal procedures concerning sexual orientation discrimination and not through the EEO complaint process. Title VII requires that all personnel actions affecting federal employees or applicants for employment ". . . shall be made free from any discrimination based on sex." This provision is analogous to the section of Title VII governing employment discrimination in the private sector in which it is unlawful for a covered employer to fail or refuse to hire or to discharge any individual, or otherwise to discriminate with respect to his compensation, terms, conditions, or privileges of employment, because of such individual's sex. Title VII's prohibition of sex discrimination means that employers may not rely upon sex-based considerations or take gender into account when making employment decisions This applies equally in claims brought by lesbian, gay, and bisexual individuals under Title VII. When an employee raises a claim of sexual orientation discrimination as sex discrimination under Title VII, the question is not whether sexual orientation is explicitly listed in Title VII as a prohibited basis for employment actions. It is not. Rather, the question for purposes of Title VII coverage of a sexual orientation claim is the same as any other Title VII case involving allegations of sex discrimination—whether the agency has relied on sex-based considerations or taken gender into account when taking the challenged employment action. DECISION AND REMEDY: Complainant Baldwin has stated a claim of sex discrimination. We conclude that sexual orientation is inherently a "sex-based consideration," and an allegation of discrimination based on sexual orientation is necessarily an allegation of sex discrimination under Title VII. Allegations of discrimination on the basis of sexual orientation state a claim of discrimination on the basis of sex within the meaning of Title VII. Furthermore, we conclude that Complainant's initial EEO Counselor contact was timely. We remand Complainant's claim of discrimination to the Agency for further processing for a determination on the merits.

Additional Laws Governing the Employment Relationship

--Fair Labor Standards Act: Employers must follow federal minimum-wage and hour laws. FLSA covers all employers engaged in interstate commerce or the production of goods for interstate commerce and requires a minimum wage of a specified amount to be paid to all employees in covered industries. Congress periodically raises the specified amount to compensate for increases in the cost of living caused by inflation. The current minimum wage is $7.25. -Family and Medical Leave Act: The FMLA covers all public employers, as well as private employers with 50 or more employees. It guarantees all eligible employees (those who have worked at least 25 hours a week for each of 12 months prior to the leave) up to 12 weeks of unpaid leave during any 12-month period for any of the following family-related occurrences: the birth of a child; the adoption of a child; the placement of a foster child in the employee's care; the care of a seriously ill spouse, parent, or child; or a serious health condition that renders the employee unable to perform any of the essential functions of his or her job. -Unemployment compensation: The Federal Unemployment Tax Act (FUTA) created a state system that provides unemployment compensation to qualified employees who lose their jobs. -Workers' compensation laws:State laws provide for financial compensation to employees or their dependents when a covered employee is injured on the job. -Consolidated Omnibus Budget Reconciliation Act:COBRA ensures that when employees lose their jobs or have their hours reduced to a level at which they would not be eligible to receive medical, dental, or optical benefits from their employer, the employees will be able to continue receiving benefits under the employer's policy for up to 18 months by paying the premiums for the policy. -Employee Retirement Income Security Act: ERISA sets minimum standards for most voluntarily established pension and health plans in private industry to provide protection for individuals in these plans. -Occupational Safety and Health Act of 1970: The Occupational Safety and Health Administration is responsible for setting safety standards under OSHA and enforcing the act through inspections and levying fines against violators.

Labor Laws and Unions

-Wagner Act of 1935: The Wagner Act was the first major piece of federal legislation adopted explicitly to encourage the formation of labor unions and provide for collective bargaining between employers and unions as a means of obtaining the peaceful settlement of labor disputes. -Collective bargaining:Collective bargaining consists of negotiations between an employer and a group of employees to determine the conditions of employment. -National Labor Relations Board: The Wagner Act created the NLRB, an administrative agency, to interpret and enforce the National Labor Relations Act (NLRA) and to provide for judicial review in designated federal courts of appeal. -Taft-Hartley Act of 1947: Also known as the Labor-Management Relations Act, the Taft-Hartley Act was designed to curtail some of the powers the unions had acquired under the Wagner Act. Just as the Wagner Act designated certain employer actions as unfair, the Taft-Hartley Act designated certain union actions as unfair. -Landrum-Griffin Act of 1959:The Landrum-Griffin Act primarily governs the internal operations of labor unions. It requires certain financial disclosures by unions and establishes civil and criminal penalties for financial abuses by union officials. "Labor's Bill of Rights," contained in the act, protects employees from their own unions.

Exceptions to the Parol Evidence Rule

1. Contracts that are subsequently modified. 2. Contracts conditioned on orally agreed-on terms. 3. Contracts that are not final because they are part written and part oral. 4. Contracts with ambiguous terms. 5. Incomplete contracts. 6. Contracts with obvious typographical errors. 7. Voidable or void contracts. 8. Evidence of prior dealings or usage of trade.

Contracts That Require a Writing

1. Contracts whose terms prevent possible performance within one year. 2. Promises made in consideration of marriage. 3. Contracts for one party to pay the debt of another if the initial party fails to pay. 4. Contracts related to an interest in land. 5. Under the Uniform Commercial Code, contracts for the sale of goods totaling more than $500.

Sufficiency of the Writing

A sufficient writing under the statute of frauds must clearly indicate (1) the parties to the contract, (2) the subject of the agreement, (3) the consideration given for the contract, (4) all relevant contractual terms, and (5) the signature of at least the party against whom action is brought. Under the UCC, a writing must clearly indicate (1) the quantity to be sold and (2) the signature of the party being sued. Under neither the statute of frauds nor the UCC must the writing be contained within one document.

Age Discrimination in Employment Act of 1967

ADEA prohibits employers from refusing to hire, discharging, or discriminating in terms and conditions of employment on the basis of an employee or applicant being age 40 or older.

When May an Employee Be Fired?

At-will employment means that any employee who is not employed under a contract or a collective bargaining agreement may quit at any time for any reason or no reason at all, with no required notice to the employer. Moreover, the employer may fire the employee at any time, with no notice, for almost any reason.

Methods of Discharging a Contract

Contracts may be discharged in a number of ways, including: • The occurrence of a condition subsequent or the nonhappening of a condition precedent. • Complete or substantial performance. • Material breach. • Mutual agreement. • Operation of law.

Assignments and Delegations

Contracts typically involve an agreement between two parties: -Obligor: Contractual party who owes a duty to the other party in privity of the contract. -Obligee: Contractual party who is owed a duty from the other party in privity of the contract. An assignment is the transfer of rights under a contract to a third party. -Assignor: The party to a contract who transfers his or her rights to a third party. -Assignee: A party not in privity to a contract who is the recipient of a transfer of rights to a contract. Contractual rights that cannot be assigned: 1. Rights that are personal in nature. 2. Rights that would increase the obligor's risks or duties. 3. Rights in a contract that expressly forbids assignment. A delegation is the transfer of a duty under a contract to a third party. -Delegator: The party to a contract who transfers his or her duty to a third party. -Delegatee: A party not in privity to a contract who is the recipient of a transfer of a duty in a contract. Contractual duties that cannot be assigned: 1. Duties that are personal in nature. 2. Duties whose performance by the delegatee would be substantially different from that which the obligee originally contracted. 3. Duties in a contract that expressly forbids delegation.

Remedies

Courts may grant parties in a breach-of-contract action legal or equitable remedies. Legal remedies, or money damages, include: • Compensatory damages. • Nominal damages. • Punitive damages. • Liquidated damages. Equitable remedies, which are granted only when legal remedies are inadequate, include: • Restitution and rescission. • Specific performance. • Injunction.

Duress

Duress occurs when one party threatens the other with a wrongful act unless assent is given. Such assent is not legal assent because coercion interferes with the threatened party's free will. For a court to rescind the agreement, the injured party must demonstrate that the duress left no reasonable alternatives to agreeing to the contract.

Equal Pay Act of 1963

EPA prohibits an employer from paying workers of one gender less than the wages paid to employees of the opposite gender for work that requires equal skill, effort, and responsibility.

Federal Employment Discrimination Laws Governing Employers

Federal law may be described as a minimum level of protection for all workers. State laws may give employees more, but not less, protection than federal laws. Some of the most important federal employment discrimination laws are the Civil Rights Act (CRA) of 1964— Title VII (as amended by the Civil Rights Act of 1991); Pregnancy Discrimination Act (PDA) of 1987; Age Discrimination in Employment Act (ADEA) of 1967; Americans with Disabilities Act; and Equal Pay Act of 1963.

The Importance of Genuine Assent

If assent is not genuine, or legal, a contract may be voidable. For purposes of planning, it is important for people to understand the circumstances under which failure of assent may render their contracts voidable.

Hiring Foreign Workers

In 1986,Congress passed the Immigration Reform and Control Act. This act is an amendment to the Immigration and Nationality Act (INA) and requires employers to verify the identity and eligibility of all individuals hired in the United States after November 6, 1986. If it is discovered that an employer knowingly employed undocumented immigrant workers, that employer will be in serious legal trouble. Employers who fail to comply with the laws regarding the hiring of foreign workers risk criminal and civil sanctions.

Discrimination Based on Marriage

In 2015 the U.S. Supreme Court held that marriage is a fundamental right for all and struck down state laws forbidding same-sex marriage.

Integrated Contracts

Integrated contracts are written contracts, within the statute of frauds, intended to be the complete and final representation of the parties' agreement, thus precluding the admissibility of parol evidence other than in the exceptions previously listed.

Use of Social Media in Hiring Decisions

May an employer use social media in hiring decisions? The answer is yes—if it's done carefully. Probably the biggest concern is discrimination. A potentially little-known problem with using social media—particularly the most popular sites like Facebook and LinkedIn—is that the subscribers do not represent the U.S. or global job-applicant pools. Recent surveys show that social media sites have lower percentages of Latino and black users than are in the general population. The burden, then, is on the employer to widen their search for new applicants to include job boards, newspapers, magazines, and job fairs.

Misrepresentation

Misrepresentation is an intentionally untruthful assertion by one of the parties about a material fact. An innocent misrepresentation occurs when the party making the false assertion believes it to be true. The misled party may rescind the contract. When a misrepresentation is fraudulent, any assent that is given is gained by deceit. The courts permit rescission for fraudulent misrepresentation. In addition to requiring false assertion and the intent to deceive, fraudulent misrepresentation also requires justifiable reliance on the assertion by the innocent party. "If the misrepresentation is negligent, that is, made when the defendant would have known the statement was false had he taken reasonable care before making the statement, the misrepresentation is treated the same as a fraudulent misrepresentation."

Mistake

Mistakes are erroneous beliefs about the material facts of a contract at the time the agreement is made. They may be either unilateral or mutual. Only under certain rare conditions is a unilateral mistake a basis for rescinding a contract. However, if both parties to a contract are mistaken about a material fact, either can opt to rescind the contract. In cases of mutual mistake, the agreement was not based on a meeting of the minds, a basic criterion for legal assent.

Discrimination Based on Sexual Orientation— Actionable?

No federal legislation currently prohibits discrimination based on sexual orientation. What does exist are individual state laws that prohibit such discrimination. State laws prohibiting discrimination based on sexual orientation exist in 21 states and the District of Columbia.

Employee Privacy in the Workplace

Privacy issues are of increasing importance in the workplace. Privacy policies should cover matters such as employer surveillance policies, control of and access to medical and personnel records, drug testing, and e-mail policies. -Omnibus Crime Control and Safe Streets Act of 1968: Employers cannot listen to the private telephoneconversations of employees or disclose the contents of these conversations. They may, however, ban personal calls and monitor calls for compliance as long as they discontinue listening to any conversation once they determine it is personal. Violators may be subject to fines of up to $10,000. -Electronic Communications Privacy Act of 1986: Under ECPA, employees' privacy rights were extended to electronic forms of communication, including e-mail and cellular phones. ECPA outlaws the intentional interception of electronic communications and the intentional disclosure or use of the information obtained through such interception.

MIND & MOTION UTAH INVESTMENTS, LLC, APPELLEE V. CELTIC BANK CORPORATION

SIGNIFICANCE OF THE CASE: It illustrates how the courts distinguish between conditions that must occur before a party's duties under the contract, and covenants, the breach of which discharges the nonbreaching parties and gives rise to the payment of damages to that party. FACTS: Mind & Motion entered into a real estate purchase contract (REPC) with Celtic Bank to buy a large piece of the bank's foreclosed property. Although the county had approved plans to construct condominiums on the land, the former owner had not recorded the plats for the first phase of development, so the REPC required Celtic Bank to record the plats by a certain date. However, it also gave Mind & Motion sole discretion to extend the recording deadline as necessary to allow Celtic Bank enough time to record. It further provided that any extension of the recording deadline automatically extended the deadline to complete the transaction. After extending the recording deadline once, Mind & Motion declined to extend it a second time and sued Celtic Bank for breach of contract. The district court granted summary judgment in Mind & Motion's favor, concluding that the recording provision was unambiguously a covenant, not a condition. It then awarded Mind & Motion $100,000 in liquidated damages and more than $200,000 in attorney fees, as well as the return of Mind & Motion's $100,000 earnest money deposit. On appeal, Celtic Bank argued that summary judgment was improper because the recording provision is unambiguously a condition. ISSUE: Was the term in the contract that the Celtic Bank would record the plats of land being sold a condition that would give rise to a duty on the buyer's part, or a covenant of the contract, the breach of which would discharge the buyer and give him the right to sue the bank for breach of contract? REASONING: Conditions are typically phrased using explicitly conditional terms. In this contract, the parties employed explicitly mandatory language to characterize the recording provision, while using explicitly conditional language elsewhere in the agreement. Therefore, there is no plausible way to read the recording provision as anything other than a covenant. CONCLUSION: The Court of Appeals upheld the district court's grant of summary judgment in Mind & Motion's favor, concluding that the recording provision was unambiguously a covenant, not a condition.

TELEKENEX IXC, INC. V.CHARLOTTE RUSSE, INC.

SIGNIFICANCE OF THE CASE: This case demonstrates that duress in the business setting must amount to more than the simple pecuniary loss. To establish the duress defense, one must be able to prove significant business loss. FACTS: In December 2004, Charlotte Russe entered into a Master Service Agreement with AuBeta Network Corporation for communication services at its retail stores. The agreement was renewed several times. Just before it was to terminate in March of 2009, Tom Hunsinger from AuBeta e-mailed Giri Durbhakula, Charlotte Russe's Vice President of Technology. Hunsinger stated that Charlotte Russe would need to "make a commitment to Telekenex to avoid service disruption." Telekenex was taking over the contract. Durbhakula then received a proposed amendment to the Master Service Agreement. Charlotte Russe only had two days to respond. Durbhakula signed the Amendment but pointed out that nobody had explained to Charlotte Russe why the existing Agreement was no longer valid. Durbhakula stated that "it has been made clear repeatedly that our service would be shut off if we do not sign up to a long term commitment." Page 247 Two months later, Durbhakula told Chaney that Charlotte Russe believed the Amendment was unenforceable. Charlotte Russe obtained a Temporary Restraining Order, enjoining Telekenex from terminating Charlotte Russe's service. Meanwhile, Telekenex sued Charlotte Russe for breach of contract. Pleadings were served on Charlotte Russe, but the papers were lost and Charlotte Russe did not answer. The trial court entered a default judgment against Charlotte Russe. Charlotte Russe appealed, arguing that it had presented substantial evidence of a strong defense of duress to Telekenex's claims. ISSUE: Is economic loss in the business setting sufficient to establish a defense of duress? REASONING: In Washington, business compulsion is a type of duress in which a party is left with a choice between suffering a serious business loss or making a detrimental payment. Typically, duress will serve as a defense to a breach of contract claim only if the breaching party was left with no reasonable alternative but to agree to the terms demanded by the other party. Moreover, the defense will fail if the party claiming duress contributed to his own vulnerability. For example, a party who actively tries to sell his business, seeks out a purchaser, and accepts a very low bid will be unlikely to claim duress. However, when a party, such as Charlotte Russe, is operating under a contract that is not expiring, the party does not have notice of termination under the terms of the contract, and there is no indication of self-imposed pressure to enter into the agreement, the defense may succeed. Finally, the defense is available when a party who does not immediately accept the terms will suffer an immediate and substantial business loss. Here, Charlotte Russe established that if it had failed to agree to the terms, 185 of its stores would have been unable to connect to the Internet, connect to the company data center, use the telephone, process customer purchases, track inventory, keep employee time cards, or access company e-mail. Charlotte Russe's inability to perform its business would have resulted in financial harm as well as harm to the company's goodwill and reputation. DECISION AND REMEDY: The case was originally decided on a motion for default judgment. The court found that Charlotte Russe had established a prima facie defense of duress and remanded for further proceedings.

THRIFTY RENT-A-CAR SYSTEM V. SOUTH FLORIDA TRANSPORT

SIGNIFICANCE OF THE CASE: This case illustrates how strictly courts look at the circumstances to determine whether to apply the doctrine of commercial impracticability. FACTS: The plaintiffs, Thrifty Rent-A-Car System and its affiliates DTG and Rental Car Finance Corp., allowed South Florida Transport (SFT), the defendant, to establish a Thrifty franchise. In 2003, they entered into four agreements, providing SFT the right to use Thrifty's trademark and business methods in exchange for payment to Thrifty of licensing and administrative fees and requiring SFT to maintain a fleet of automobiles for rent. In July 2004, SFT provided DTG with a check as payment, but it was returned for insufficient funds. SFT continued to make delinquent payments, and by August, SFT owed Thrifty and DTG $1,134,819.40. Due to SFT's failure Page 290to make payments, Thrifty and DTG informed SFT that they would terminate the licensing agreements and repossess the vehicles, to which DTG had legal title. However, DTG agreed to postpone repossession due to predictions of severe weather and allowed SFT to continue renting vehicles until repossession was completed. When DTG repossessed the vehicles, DTG noticed that numerous cars were missing. SFT notified DTG that it had sold 51 vehicles without authorization. By August 2005, SFT owed Thrifty and DTG $4,238,249.53. SFT claimed that several hurricanes rendered its business operations commercially impracticable. The plaintiffs filed a motion for summary judgment, seeking full reimbursement for the debts SFT owed. ISSUE: Under what circumstances will commercial impracticability excuse nonperformance of a contract? REASONING: In the words of the court: The doctrine of commercial impracticability is typically invoked in cases involving the sale of goods. Codified in section 2-615 of the Uniform Commercial Code (UCC), which has been adopted by the Oklahoma legislature, the doctrine of commercial impracticability provides a defense to a seller for a delay in delivery or nondelivery of promised goods if performance has been made impracticable by a contingency, the nonoccurrence of which is an assumption of the contract. Commercial impracticability may excuse a party from performance of his obligations under a contract where performance has become commercially impracticable because of unforeseen supervening circumstances not within the contemplation of the parties at the time of contracting. UCC commentary provides that a party pleading commercial impracticability must demonstrate the "basic assumption" prong of the test also found in the impracticability of performance context, that is, that the nonoccurrence of the supervening event was a basic assumption of the parties at the time of contracting. A rise or a collapse in the market standing alone does not constitute a justification for failure to perform. A contract is deemed commercially impracticable when, due to unforeseen events, performance may only be obtained at "an excessive and unreasonable cost . . . or when all means of performance are commercially senseless." In applying the doctrine of commercial impracticability, the crucial question is "whether the cost of performance has in fact become so excessive and unreasonable that failure to excuse performance would result in grave injustice." . . . The evidence strongly suggests that the non-occurrence of hurricanes was not a basic assumption of the parties' agreements. Moreover, defendant provides no evidence to support a suggestion that the event of the hurricanes made the cost of performance of the terms of the agreements unduly burdensome, or even remotely more expensive. Finally, the Court observes, again, that SFT was behind on its payments to Thrifty and DTG before the arrival of the hurricanes in August 2004. No genuine issue of material fact exists, and the Court holds that the defense of commercial impracticability is unavailable to defendant. DECISION AND REMEDY: The plaintiffs' motion for summary judgment was granted.

S. BROOKE PURLL, INC., T/A PURLL CONSTRUCTION V.PATRICK DARRELL VAILES

SIGNIFICANCE OF THE CASE: This case illustrates the preference for upholding liquidated-damage clauses. FACTS: The plaintiff hired the defendant to renovate his house and paid him a $5,000 initial payment under the construction contract but failed to do initial demolition work required under the contract. The contract contained a clause stating: The [owner] further agrees that if he shall cancel this Contract for any reason, whatsoever, then he shall pay to the contractor as fixed and liquidated damages, without proof of loss, the sum of money equal to Thirty Five Percent (35%) of the full contract price hereinabove stated. Furthermore, if it becomes necessary for the Contractor to file suit or take other legal action on this Contract because of a breach on the part of the party of the second part, the party of the second part agrees to pay reasonable attorney fees and court cost. The plaintiff sued the defendant contractor for return of his deposit, and the defendant counterclaimed for $36,102 and attorney fees, the amount that would be required under Page 296the liquidated-damage clause. The trial court held that the plaintiff had breached the contract, but it found the liquidated-damage clause to be an unenforceable penalty clause and awarded the contractor $1,722. The defendant appealed. ISSUE: Was the clause imposing a payment of 35 percent of the contract value for breach by the owner a penalty clause or a valid liquidated-damage clause? REASONING: Today, the trend is toward furthering freedom of contract through the enforcement of stipulated-damage provisions as long as they do not clearly disregard the principle of compensation. Such clauses simplify the resolution of a breach-of-contract dispute and give the parties an opportunity to resolve the damage question without resorting to litigation, by setting the measure of damages at the outset, before a breach even occurs. Such provisions are especially appropriate when the parties enter into a contract in which the damages are uncertain in amount and cannot be easily ascertained. Thus, the courts tend to uphold these clauses unless they are clearly unreasonable. The liquidated sum must simply bear a reasonable relation to the damages foreseeable at the time the contract was made. The burden of proof is on the breaching party to demonstrate that the damage clause is disproportionate to the foreseeable damages. In this case, the plaintiff provided no such evidence. The full contract price was $103,148.71. The contractor testified without contradiction that two-thirds of the contract price represented materials and labor and one-third represented his profit. The contractor explained that he consulted the Ames Construction Guide for the D.C. metropolitan area, which was customarily used in the industry for pricing construction jobs, in establishing his price. Thus, there was no evidence that the clause was unreasonable. The trial court had inappropriately struck the clause down because the contractor had failed to introduce evidence of his out-of-pocket expenses; such proof is not required to uphold a liquidated-damage clause. DECISION AND REMEDY: The lower court's decision was reversed, in favor of the defendant contractor.

FANTASTIC SAMS SALONS CORP. V. PSTEVO, LLC AND JEREMY BAKER

SIGNIFICANCE OF THE CASE: This case important because it demonstrates the importance of being able to prove all of the elements of misrepresentation. FACTS: Fantastic Sams Salons entered into a franchise agreement with PSTEVO, LLC and Jeremy Baker (collectively, "PSTEVO") in which Fantastic Sams allowed PSTEVO to operate a Fantastic Sams franchised salon. Later, Fantastic Sams initiated a lawsuit against PSTEVO seeking declaratory relief with regard to the franchise Page 243agreement. In other words, Fantastic Sams wanted a court to clearly spell out the rights that Fantastic Sams held under the agreement. PSTEVO then asserted several counterclaims, including a claim of fraudulent misrepresentation by Fantastic Sams. PSTEVO alleged that, prior to entering into the franchise agreement, Baker met with two agents of Fantastic Sams who presented Baker with several financial disclosure documents. The documents allegedly stated that PSTEVO only needed three months worth of working capital to open the salon, and that the salon would be profitable after this three-month period. PSTEVO alleged that the agents and Fantastic Sams knew that it would take longer than three months for the salon to be profitable, and that these misrepresentations were material because PSTEVO relied on them when deciding whether to enter into the agreement. Fantastic Sams moved to dismiss the fraudulent misrepresentation claims. ISSUE: Did Fantastic Sams have the right, under the franchise agreement, to dismiss the misrepresentation claims? REASONING: Fantastic Sams moved to dismiss PSTEVO's fraudulent misrepresentation claim by way of Federal Rule of Civil Procedure 12(b)(6). This means that Fantastic Sams was essentially arguing that PSTEVO failed to allege one or more of the key elements of a fraudulent misrepresentation claim, and therefore PSTEVO's claims were not sufficient enough to bring to trial. The court relied on the criteria for FRCP 12(b)(6) set forth in Ashcroft v. Iqbal, which stated that for a claim to survive this rule, it must be facially plausible: "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." When arguing why PSTEVO's claims were insufficient, Fantastic Sams pointed to a disclaimer in the franchise agreement that read, "No oral, written or visual claim or representation which stated or suggested any sales, income or profit levels was made to me, except:", after which Baker had written "none" and initialed his response. Fantastic Sams argued that Baker had signified that no claims regarding the franchise's profitability were made to Baker. Thus, PSTEVO was precluded from claiming that it relied on Fantastic Sams' or its agents' representations of the franchise's profitability because no such representations were made. Being that reliance is a necessary element of a fraudulent misrepresentation claim, Fantastic Sams argued that PSTEVO's claim necessarily fails because PSTEVO could not argue reliance. The court considered that Baker had, indeed, affirmed that no representations of profitability were made to him, as evidenced by his initials. Baker could therefore not argue that he relied on claims of profitability. The court ruled that PSTEVO's claims were not facially plausible because, lacking this reliance, PSTEVO was precluded from making a convincing claim that Fantastic Sams was liable for fraudulent misrepresentation. DECISION AND REMEDY: The court granted Fantastic Sams' motion to dismiss the fraudulent misrepresentation claims under FRCP 12(b)(6).

HAMILTON V. STATE FARM FIRE & CASUALTY INSURANCE COMPANY

SIGNIFICANCE OF THE CASE: This case provides an example of when a plaintiff cannot recover penalties from an insurance company. FACTS: When the plaintiffs' home was ruined by a hurricane, the couple moved out of the home to a new residence. After they moved out of the house, one of the insureds reported the theft of a storage truck. The plaintiffs provided the defendant insurance company with several documents and submitted an insurance claim. However, the plaintiffs refused to allow representatives from the defendant company to inspect their other homes or give the company other vital documents proving the damage of certain assets. Thus, the defendant company denied the plaintiffs' insurance claim, arguing that the couple materially breached the contract because they did not comply with the terms of the policy. The district court granted summary judgment for the defendant company. The plaintiffs appealed. ISSUE: Should a plaintiff be permitted to recover penalties under an insurance policy if they do not comply with the cooperation clause of the insurance policy? REASONING: Failing to comply with the terms of a cooperation clause constitutes a material breach of said policy, and, under this circumstance, a plaintiff cannot recover penalties under that same insurance policy. Louisiana law provides that an insurance policy is a contract between the parties and should be construed by using the general rules of interpretation of contracts set forth in the Louisiana Civil Code. "If the policy wording at issue is clear and unambiguously expresses the parties' intent, the insurance contract must be enforced as written." Cooperation clauses in insurance contracts "fulfill the reasonable purpose of enabling the insurer to obtain relevant information concerning the loss while the information is fresh." Compliance with insurance policy provisions is a condition precedent to recovery under that policy, which must be fulfilled before an insured may proceed with a lawsuit. In this case, the Hamiltons reported the alleged theft to local law enforcement, submitted their claim to State Farm, and returned the PPIFs to State Farm as requested; the Hamiltons failed to provide most of the supporting documentation of their loss as requested by State Farm, with the exception of a few duplicate receipts. When asked for the additional documentation, the Hamiltons simply provided their sworn statements pertaining to the losses claimed, without providing the requested additional supporting documentation. The Hamiltons' failure to comply with State Farm's request to examine the separate residences in which they lived, while not expressly required under the policy's cooperation clause, appears from the record to have been the event that prompted State Farm to request the examinations under oath. The Hamiltons, however, failed to respond to State Farm's multiple verbal and written requests for examinations under oath. Their failure to do so was in direct violation of the policy's cooperation clause provision, Section 1—Conditions, (2)(d)(3)(b), and is thus considered a material breach of the contract. Page 287 Because the Hamiltons materially breached the terms of the policy by failing to comply with the terms of the cooperation clause, they were precluded from recovering under the policy. Furthermore, considering that State Farm's denial of the claim was due to the Hamiltons' material breach of the policy, the Hamiltons are also precluded from recovering penalties and attorney fees. DECISION AND REMEDY: The Court of Appeals ruled in favor of the defendant and affirmed the decision of the district court.

SIMKIN V. BLANK

SIGNIFICANCE OF THE CASE: This case provides illustration of the criteria courts use to determine whether a plaintiff can use a mutual mistake claim. FACTS: When the plaintiff and defendant divorced in 2006, they split their $13.5 million in assets. Most of the plaintiff's $5.4 share of the settlement was invested in Bernie Madoff's Ponzi scheme, whereas the defendant received a cash settlement. Then, in 2008, the plaintiff thought the terms of the divorce contract should be renegotiated because he lost almost all of his divorce proceeds when it came to light that his investment in Madoff's business turned out to be fraudulent. The plaintiff further argued that both he and his ex-wife had shared in the mistake of investing funds into Madoff's project, yet only the plaintiff received the invested funds in the divorce settlement, and the defendant received cash. The plaintiff also argued that because his funds never existed as an investment because they had already vanished in the Ponzi scheme, he never really received an equal share of their existing assets. Thus, he asked the defendant whether the two could renegotiate the contract. When she refused, the plaintiff sued. A lower court granted the plaintiff the right to sue. The defendant appealed this decision. ISSUE: Should the plaintiff be permitted to use a mutual mistake claim in the context of a marital settlement agreement? REASONING: A plaintiff may be permitted to use a mutual mistake claim in the context of a marital settlement agreement if the mutual mistake existed at the time that the contract was entered into and if the mistake is "material." In this case, the core allegation underpinning husband's mutual mistake claim—that the Madoff account was nonexistent when the parties executed their settlement agreement in June 2006—does not amount to a material mistake of fact as required by our case law. The premise of the husband's argument is that the parties mistakenly believed that they had an investment account with Bernard Madoff when, in fact, no account ever existed. In the husband's view, this case is no different from one in which parties are under a misimpression that they own a piece of real or personal property but later discover that they never obtained rightful ownership, such that a distribution would not have been possible at the time of the agreement. But that analogy is not apt here. The husband does not dispute that, until the Ponzi scheme began to unravel in late 2008—more than two years after the property division was completed—it would have been possible for him to redeem all or part of the investment. In fact, the amended complaint contains an admission that the husband was able to withdraw funds (the amount is undisclosed) from the account in 2006 to partially pay his distributive payment to the wife. Given that the mutual mistake must have existed at the time the agreement was executed in 2006, the fact that the husband could no longer withdraw funds years later is not determinative. Given the extensive and carefully negotiated nature of the settlement agreement, we do not believe that this presents one of those exceptional situations warranting reformation or rescission of a divorce settlement after all marital assets have been distributed. DECISION AND REMEDY: The Court of Appeals found in favor of the defendant and reversed the decision of the lower court.

LAWRENCE V. FOX

SIGNIFICANCE OF THE CASE: This case was one of the earliest cases that upheld the rights of third parties to sue promisors to have agreements enforced. FACTS: In November 1857, Holly, at the request of Fox, loaned him $300. Before loaning the money, Holly informed Fox that Holly owed Lawrence $300, due the next day. In consideration of the loan, at the time of the loan, Fox agreed to pay Lawrence for Holly the next day. Fox did not pay, and Lawrence sued him. Fox sought to dismiss the charges because there was no proof to show that Holly was indebted to Lawrence, Fox's agreement with Holly to pay Lawrence was void for want of consideration, and there was no privity between Lawrence and Fox. Fox's motion to dismiss was denied. The jury ultimately found in favor of Lawrence for the sum of the loan plus interest. Fox appealed and the judgment was affirmed. Fox then appealed again. ISSUE: Does Lawrence have the right to sue Fox, the promisor, for payment? REASONING: There is a principle of law, found in English law as well as in the law of many states, that if one person makes a promise to another for the purpose of benefiting a third party, that third person may "maintain an action upon it." Although many of the preceding cases in which this principle was applied were trust cases, nothing about the law requires the case to be a trust case. Fox's duty to pay Lawrence in return for the loan he received from Holly was a clear condition of the loan. The spoken promise is equal to a written promise in this case. Therefore, Lawrence should receive payment from Fox in the interest of justice, even if the law could be more narrowly interpreted. Page 273 DECISION AND REMEDY: The decision of the earlier court was affirmed. Fox was required to pay Lawrence as he had promised Holly.

BOBBY DEAN NICKEL V.STAPLES CONTRACT & COMMERCIAL INC.

SIGNIFICANCE: Despite defendants' protestations that plaintiff was fired for a legitimate, nondiscriminatory reason (theft and unethical behavior), the jury had the right, based on the substantial evidence presented at trial, to reject defendants' reasons and determine that the firing was based on age discrimination. FACTS: Plaintiff had worked for Corporate Express, an office-supplies company catering to businesses, for seven years when Staples Inc. purchased Corporate Express in June 2008 and renamed the company Staples Contract and Commercial Inc. Plaintiff's job was to manage the physical plant at the Corporate Express fulfillment facility in La Mirada. His duties included general repair and maintenance, equipment maintenance, and security. Plaintiff maintained this supervisory position after Staple's Inc.'s takeover of Corporate Express. In 2007, Plaintiff began reporting to a new manager, Lionel Marrero. After the 2008 takeover, Marrero worked for Defendants. There was evidence at trial that Marrero was on a mission to cut costs at the La Mirada facility by replacing older, higher paid employees with part-time and temporary employees. His method was to increase the workload for older employees, forcing them into retirement, or "[write] them up" for errors or ethical violations, creating a basis for their termination. In 2011, when Plaintiff was 64 years old, Defendants terminated Plaintiff's employment based on allegations that he stole a bell pepper from the La Mirada facility's cafeteria, which was run by a third-party vendor. Plaintiff explained that he entered the cafeteria after hours to evaluate whether the refrigerators were working properly. When he opened the fridge, a salad fell out onto the floor. Plaintiff threw out the salad but ate the bell pepper. He testified in his deposition and at trial that there was an accepted practice of taking food from the cafeteria after hours and paying for it later. When he was investigated for the theft, Plaintiff reported that he had previously taken three Monster drinks after hours and subsequently paid for them. A cafeteria worker likewise told company investigators that she noticed the drinks missing and that Plaintiff had paid for them. Plaintiff initially stated in a written statement that he forgot to pay for the 68-cent bell pepper but later testified at his deposition and at trial that he did pay for the pepper. Following his termination, Plaintiff filed this lawsuit against Defendants, alleging age-based discrimination. Plaintiff tried his age discrimination claim to a jury, who found in his favor and awarded him approximately $3.2 million in compensatory damages and $22.8 million in punitive damages ($13,053,664 against Staples, and $9,790,248 against Staples Inc.). Defendants filed motions for new trial and for judgment notwithstanding verdict. Partially granting Staples Inc.'s motion for judgment, the court reduced punitive damages to $13 million by striking the punitive damages against Staples Inc. The court entered judgment jointly against Defendants in the amount of $16,317,080. ISSUE: The court examined whether there was insufficient evidence of discrimination to support the jury's verdict given defendants' assertions of a legitimate, nondiscriminatory business reason for the firing (i.e., alleged theft and unethical behavior)? REASONING: Defendants argue they were entitled to judgment notwithstanding the verdict because Plaintiff failed to present sufficient evidence that age was a substantial factor motivating his termination. FEHA prohibits age discrimination by employers against employees. A plaintiff alleging disparate treatment discrimination has the burden to establish unlawful discrimination by showing that he was a member of the protected age group, he competently performed his job, he was terminated or suffered an adverse employment action, and there was a discriminatory motive for the termination. As to the last prong, "[t]here must . . . be evidence of a causal relationship between the [discriminatory] animus and the adverse Page 537employment action." If the employer shows that its action was taken for a legitimate, nondiscriminatory reason, the plaintiff must show that the employer's reason for termination was pretextual. Specifically, Defendants contend that there is insufficient evidence of discriminatory animus and persuasive evidence that Defendants based the termination on a legitimate, nondiscriminatory reason: Plaintiff's unethical behavior and violation of the anti-theft policy. We reject Defendants' argument that there was a dearth of evidence Plaintiff was fired because of his age. Based on testimony from Daniel Velasquez, Plaintiff, and other employees, the jury could reasonably find that Marrero was motivated by anti-age animus and Marrero's role in the decision to terminate Plaintiff was a substantial factor causing the termination. Marrero's comments about older employees, made in the context of an intention to eliminate them from the workforce, provided substantial evidence of age-based animus. Plaintiff elicited testimony from Velasquez, a former Staples manager who worked with Plaintiff prior to and at the time of his termination. Velasquez testified he had witnessed a "concerted attempt to get rid of the higher paid, older workers" following Defendants' takeover. In management meetings, Velasquez heard Marrero talk about the company's desire to push out older employees and heard Marrero say he wanted to find reasons to discharge them. Specifically, Marrero told the managers to "'[t]ake a closer look at the older people. They are starting to drag and are slowing down. If they are not top performers, write them up and get rid of them.'" Marrero also said, "'[w]e need young energetic people. Walk around the facility with the older workers and if they cannot keep up then get rid of them.'" Plaintiff also testified that Marrero made similar ageist comments at managers' meetings. Former employees also testified that they and their coworkers were pushed out of their jobs as a result of this discriminatory animus. The testimony of witnesses Velasquez, Vance, Munoz, and Evans provided substantial evidence of Marrero's discriminatory comments and Defendants' practice of forcing out older workers. This testimony provided ample evidence supporting the court's finding there was substantial evidence of discrimination. DECISION AND REMEDY: The judgment is affirmed on all grounds. Plaintiff Bobby Dean Nickel is awarded his costs on appeal.

TERESA HARRIS V. FORKLIFT SYSTEMS, INC.

SIGNIFICANCE: In this case, the Supreme Court for the first time held that harassment in and of itself is illegal and actionable, regardless of the amount of damage to the victim. FACTS: During her tenure as a manager at defendant Forklift Systems Inc., plaintiff Harris was repeatedly insulted by the defendant's president because of her gender and subjected to sexual innuendos. In front of other employees, the president frequently told Harris, "You're just a woman, what do you know?" He sometimes asked Harris and other female employees to remove coins from his pockets and made suggestive comments about their clothes. He suggested to Harris in front of others that they negotiate her salary at the Holiday Inn. When Harris complained, he said that he would stop, but he continued behaving in the same manner, so Harris quit. She then filed an action against the defendant for creating an abusive work environment on the basis of her gender. The district court found in favor of the defendant, holding that some of the comments were offensive to the plaintiff but were not so serious as to affect Harris's psychological well-being severely or interfere with her work performance. The court of appeals affirmed. Plaintiff Harris appealed to the U.S. Supreme Court. ISSUE: Must an employee suffer serious psychological damage to pursue damages for a claim of sexual harassment? REASONING: In the Court's own words: As we made clear in Meritor Savings Bank v. Vinson, this language [of Title VII] "is not limited to 'economic' or 'tangible' discrimination. The phrase 'terms, conditions, or privileges of employment' evinces a congressional intent 'to strike at the entire spectrum of disparate treatment of men and women' in employment," which includes requiring people to work in a discriminatorily hostile or abusive environment. When the workplace is permeated with "discriminatory intimidation, ridicule, and insult," that is "sufficiently severe or pervasive to alter the conditions of the victim's employment and create an abusive working environment." This standard, which we reaffirm today, takes a middle path between making actionable any conduct that is merely offensive and requiring the conduct to cause a tangible psychological injury. As we pointed out in Meritor, "mere utterance of an ... epithet which engenders offensive feelings in a employee," does not sufficiently affect conditions of employment to implicate Title VII.... Likewise, if the victim does not subjectively perceive the environment to be abusive, the conduct has not actually altered the conditions of the victim's employment, and there is no Title VII violation. But Title VII comes into play before the harassing conduct leads to a nervous breakdown. A discriminatorily abusive work environment, even one that does not seriously affect employees' psychological well-being, can and often will detract from employees' job performance, discourage employees from remaining on the job, or keep them from advancing in their careers. Moreover, even without regard to these tangible effects, the very fact that the discriminatory conduct was so severe or pervasive that it created a work environment abusive to employees because of their race, gender, religion, or national origin offends Title VII's broad rule of workplace equality. The appalling conduct alleged in Meritor, and the reference in that case to environments "so heavily polluted with discrimination as to destroy completely the emotional and psychological stability of minority group workers," merely present some especially egregious examples of harassment. They do not mark the boundary of what is actionable. ... Certainly Title VII bars conduct that would seriously affect a reasonable person's psychological well-being, but the statute is not limited to such conduct. So long as the environment would reasonably be perceived, and is perceived, as hostile or abusive, there is no need for it also to be psychologically injurious. This is not, and by its nature cannot be, a mathematically precise test. But we can say that whether an environment is "hostile" or "abusive" can be determined only by looking at all the circumstances. These may include the frequency of the discriminatory conduct; its severity; whether it is physically threatening or humiliating, or a mere offensive utterance; and whether it unreasonably interferes with an employee's work performance. The effect on the employee's psychological well-being is, of course, relevant to determining whether the plaintiff actually found the environment abusive. But while psychological harm, like any other relevant factor, may be taken into account, no single factor is required. DECISION AND REMEDY: The lower court's decision was reversed and remanded in favor of the plaintiff.

HERITAGE CONSTRUCTORS, INC. V. CHRIETZBERG ELECTRIC, INC. AND RICHARD MARC CHRIETZBERG

SIGNIFICANCE: This case exhibits the statute of frauds in action and demonstrates the significance of keeping all important agreements in detailed writing. FACTS: In 2011, Heritage Constructors Inc., a general contractor that specializes in building water treatment plants, was preparing a bid to become the general contractor for the TexAmericas Center-East wastewater treatment plant improvement project. Heritage estimated that the project would take about 19 months to complete and intended to complete eighty to eighty-five percent of the project itself, but the project's electrical work necessitated the use of a subcontractor. Before Heritage's bid was due, Heritage was contacted by two electrical companies attempting to bid on a subcontract for the electrical work. Electrique Corporation bid $886,400 to perform electrical work on the project, and Chrietzberg Electric bid $704,857. With Chrietzberg being the lower bidder, Heritage took that bid and included Chrietzberg on the bid to TexAmericas. TexAmericas eventually awarded the bid to Hertitage, and Heritage and Chrietzberg congratulated each other on the successful bid. After receiving an executed contract from TexAmericas, Heritage sent Chrietzberg a proposed subcontract. Shortly thereafter, Chrietzberg notified Heritage that it was withdrawing its bid. Heritage asked Chrietzberg to reconsider, without success, and so Heritage accepted Electrique's more expensive contract after accepting certain conditions of Electrique's. Heritage sued Chrietzberg for breach of contract, promissory estoppel, and negligent misrepresentation. The trial court ruled in favor of Heritage, but awarded Heritage only twenty-eight percent of the fees it had asked for. Heritage appealed, and Chrietzberg cross-appealed, claiming that all of Heritage's causes of action were barred by the statute of frauds. QUESTION: Were Heritage's claims of breach and promissory estoppel invalid due to the statute of frauds? Page 260 REASONING: This case primarily revolved around the requirement that contracts that cannot be completed in under a year must be in writing is The Court reviewed the original project proposal, which indicated that the agreement between Heritage and Chrietzberg began December 31, 2011, and also indicated a projected project completion date of July 31, 2013. The Court ruled that the agreement would have required more than a year to complete and thus fell under the statute of frauds. Next, the Court had to determine whether the agreement was enforceable under the statute of frauds. The Court found a precedent for this case in a similar case, Cohen v. McCutchin. In that case, the United States Supreme Court had ruled that because there was no writing that identified the plaintiff as a party to the agreement in question, the agreement did not satisfy the statute of frauds. Similarly, in the bid documents, which is where the agreement between Heritage and Chrietzberg supposedly laid, Chrietzberg was not once mentioned as a party to the agreement. Heritage also failed to point out any actions it took that are unequivocally referable to its agreement with Chrietzberg. The agreement fell under the statute of frauds but failed to satisfy it, thus the Court ruled that Chrietzberg cannot be held liable for breach of the agreement. The Court then determined that there was no evidence that distinguished any of the damages supposedly caused by breach from damage caused by promissory estoppel. Therefore, because Chrietzberg was not liable for breach damages, it was also not liable for promissory estoppel damages. Similarly, the negligent misrepresentation damages were indistinguishable from the other damages and so too were denied. DECISION: The Court reversed the trial court's ruling on Heritage's breach of contract and promissory estoppel claims and affirmed their denial of of negligent misrepresentation claims.

May an Employer Discriminate against a Smoker?

Some companies either won't hire smokers or are threatening to fire current employees who will not or are unable to quit smoking. Many states have passed laws preventing companies from engaging in such action.

Exceptions to the Statute of Frauds

The exceptions include (1) admission, (2) partial performance, (3) promissory estoppel, and (4) various exceptions under the UCC.

Parol Evidence Rule

The parol evidence rule is a common law rule stating that oral evidence of an agreement made prior to or contemporaneously with a written agreement is inadmissible when the parties intend to have the written agreement be the complete and final version of their agreement.

Statute of Frauds

The term statute of frauds refers to various state laws modeled after the 1677 English Act for the Prevention of Frauds and Perjuries. These state laws are intended to (1) ease contractual negotiations by requiring sufficient reliable evidence to prove the existence and specific terms of a contract, (2) prevent unreliable oral evidence from interfering with a contractual relationship, and (3) prevent parties from entering into contracts with which they do not agree.

Third-Party Rights to Contracts

There are two main situations in which a third party gains rights to a contract to which she or he is not a party: (1) One of the contracting parties transfers rights or duties to the third party. (2) The third party is a direct beneficiary of a contract involving two other parties.

Civil Rights Act-Title VII

Title VII of CRA (1964, as amended by the Civil Rights Act of 1991) protects employees against discrimination based on race, color, religion, national origin, and sex. It also prohibits harassment based on the same protected categories. Defenses to a charge of discrimination under Title VII include merit, seniority system, and bona fide occupational qualification (BFOQ). • Disparate treatment: If the employee has been hired, fired, denied a promotion, and so on, based on membership in a protected class under Title VII, this is a form of intentional discrimination and qualifies the employee to sue for disparate-treatment discrimination. • Disparate impact: Disparate-impact cases arise when a plaintiff attempts to establish that although an employer's policy or practice appears to apply to everyone equally, its actual effect is that it disproportionately limits employment opportunities for a protected class. • Sexual harassment: Sexual harassment includes unwelcome sexual advances, requests for sexual favors, and other verbal or physical conduct of a sexual nature that implicitly or explicitly makes submission a term or condition of employment; makes employment decisions related to the individual dependent on submission to or rejection of such conduct; or has the purpose or effect of creating an intimidating, hostile, or offensive work environment. Two recognized forms are hostile environment and quid pro quo harassment. -Pregnancy Discrimination Act of 1987: PDA amended Title VII of CRA, expanding the definition of sex discrimination to include discrimination based on pregnancy. -Equal Employment Opportunity Commission: The EEOC is the federal agency charged with overseeing Title VII of the Civil Rights Act. Administrative complaints must be filed with the EEOC (or an equivalent state agency) prior to filing a lawsuit for discrimination or harassment.

Undue Influence

Undue influence refers to the persuasive efforts of a dominant party who uses a special relationship with another party to interfere with that other's free choice of the terms of a contract. Any relationship in which one party has an unusual degree of trust in the other can trigger concern about undue influence in gaining the assent of the more dependent party.

Assignment of the Contract

When ambiguous language is used, courts interpret the transfer to consist of an assignment of rights and a delegation of duties.