Essential Principles of Contract and Sales Law - Essay Example

“There was a proposal by one party and assented to in the same terms by the other party” (Oughton and Davis 24). Thus, there was a binding contract created by the offer made by Smunt and acceptance by Roginsky. In the case of Smut, such an offer became valid because prior to the acceptance, he had the intention to be bound by such a contract. Such offer of Smunt signifies a legal commitment on his part, a proposal which he has extended to Roginsky, which assumes eventual acceptance on the part of Roginsky. For an offer to be considered as accepted, “a valid act of acceptance must be made by the offeree” (Gillies 149). This was further clarified in the case of Carlill v. Carbolic Smoke Ball Co., (1893) 1 QB 256. “The first requisite of a contract is that both parties have reached an agreement. The three essential requisites of the creation of a contract are agreement, contractual intention, and consideration” (Oughton and Davis 21). Here, all the essential requisites are present. Therefore, there was a valid contract entered by both parties, giving rise to the cause of action by Roginsky against Smunt for breach of contract.

“An offer may be revoked before such offer is accepted by the offeree. If it is revoked after a valid acceptance has already taken place on the part of the offeree, such revocation is ineffective for the contract has already been perfected before the purported act of revocation (Gillies 150).” The revocation must also be communicated “directly or indirectly to the offeree to make a valid revocation. If the revocation is sent through the mail, the revocation shall not take effect unless it is received by the other party” (Gillies 150).

Under the “mailbox rule”, the traditional view is that “acceptance is effective on dispatch in a properly addressed, prepaid envelope. It is adaptable to all mediums of communication and is not only limited to just mail” (Ryan 43). One of the most common exceptions of the “mailbox rule” is “when the offeree rejects the offer through a letter, but before such letter indicating rejection is received by the offeror, a second letter is sent indicating the acceptance of the offer, and the second letter is received first. In this instance, the mailbox rule is disregarded” (Ryan 43). On the other hand, the modern view is set forth in the “Restatement (Second) of Contracts and the Uniform Commercial Code (UCC) rejects the mailbox rule. Under UCC 2-206, acceptance may be made in a reasonable manner unless the offer limits the manner of acceptance in a particular means” (Ryan 45).
As a general rule, employment contracts preferably should be in writing and signed by both parties, the employer and the employee. “Under the Statute of Frauds, a purely oral contract can be voided if there if it cannot be possibly be performed in one year” (Harper 60). The rationale behind this requisite is “to reduce frauds by requiring that certain contracts be in writing and signed by the party alleged to be in default. Absence of the written form makes the contract unenforceable” (Harper 60).

However, there are exceptions to the rule, “where an executive has performed all the duties he has contracted for but has not been paid. If this exception would not be made, the Statute of Frauds will defeat its purpose and would operate to facilitate, rather than prevent fraud, since the unscrupulous employer could rely on it to refuse payment, after having benefitted from the work performed in good faith by an executive” (Harper 60).

In this case, Wombat relied on the oral employment contract with Tony’s Toy Company and quit his job, sold his house, and moved his family to another state for the new job, only to find out after one month that he is being terminated for the position. Clearly, Wombat is entitled to “recover loss of earnings compensatory damages, exemplary or punitive damages for injury to his feelings and reputation resulting from the wrongful discharge. Such damages are intended to compensate for direct economic loss, but to express in financial terms the disapproval of the public of certain illegal behavior and to serve as punishment and warning against future misconduct of employers” (Harper 60). Therefore, Wombat is entitled to recover damages against Tony’s Toy Company for such malicious behavior and misconduct.

It is highly inappropriate and unethical on the part of Tony’s Toy Company to enter an oral employment contract with Wombat, only to leave him hanging in the end, after making a big decision in his life by quitting his job, selling his house, and bringing his family with him in a state for his new job. It is morally wrong to give him false hopes and end up losing everything he had just to comply with the terms and conditions of their contract. Therefore, this entitles him to recover damages for the injustice caused by his employer.