Court of Appeal of Tennessee, Eastern Section at Knoxville - Essay Example

Case Brief al affiliation CASE BRIEF Thelma Agnes Smith v. David Phillip Rilley Court of Appeal of Tennessee, Eastern Section at Knoxville, 2002. 2002 Tenn. App. LEXIS 65 Facts: Smith and Riley who had lived together for several years though out of wedlock. Together they opened a joint account where each one of them deposited money. After sometime, the two separated and the plaintiff Thelma, approached the court to enforce two written agreements that were about a sale and assignment of a property. Riley had entered into a lease agreement with Jerry Strickland and Wanda Strickland. The lessor was given the option to purchase by the agreement. After about four months after Riley had entered into the agreement, together with Thelma they approached an attorney to prepare for them a bill of sale and assignment for the same property. Through the bill of sale, Riley transferred to Thelma one-half undivided interest in seven units of the property. Through the assignment, Riley also assigned one-half undivided interest in the lease property. This interest included the right of survivorship in favor of Thelma for the other half interest held by Riley. The consideration for both of these agreements was $1.00. The two separated and Thelma went to court seeking to end their domestic partnership as well as enforce the two agreements. According to Riley, the two agreements lacked consideration. On the other hand, Thelma argued that their pending engagement and the amount that she had deposited into their joint account was sufficient consideration for the enforcement of both agreements. The trial court upheld the agreement and divided the property in accordance with the sale agreement as well as the assignment. Riley was not satisfied with the decision of the trial court and went to the Court of Appeal of Tennessee to appeal against the decision of the trial court. Issue: was the consideration of $1.00 given by Thelma plus love and affection adequate consideration for the sale and assignment? Ruling: the $1.00 consideration was adequate consideration for the sale agreement and sale agreement. Reasons: the court looked at the two agreements and examined them to check whether the four elements that a valid contract should fulfill were present. These four elements are offer, acceptance, consideration and intention to enter into a legally binding contract. The court in looking at the element of consideration, ruled that it was adequate. In a contract, consideration need adequate but sufficient. The court stated that consideration however small is sufficient consideration. It is the responsibility of the seller to seek Consideration is the element that distinguishes a gift from a sale and in this circumstance; the court held that the detriment suffered by the defendant in this case does not have to be equal to the responsibility that is assumed. So long as there was no fraud in passing the interests, the court could not interfere with what the parties intended when they entered into the agreements. The court ruled in favor in Thelma by upholding the principle of freedom of contract for the parties. The court reasoned that the consideration of $1.00 was just the same as a consideration of a larger sum so long as the parties entered into the agreements willingly without one party being coerced. The court also took in regard the consideration of love and affection to amount to sufficient consideration to support a conveyance. The court also looks at the defendant’s society and consortium to be compared to the concept of love and affection, which was sufficient consideration. With this reasoning, the Court of Appeal upheld the ruling by the trial court that favored Thelma. Reasoning of the Appellant When the appellant went to appeal the decision of the trial court, he was seeking to show that the consideration given by the defendant Thelma was not adequate. According to him, the consideration of $1.00 given by the defendant could not hold as adequate consideration considering the value of the property. In his view, the value of the interest that he was to transfer to Thelma should match the amount that she has given as consideration for the sale and assignment. Consideration is what a person receives in return for performing his part in a contractual obligation. According to Riley, the two agreements lacked consideration and without consideration, the two agreements were void as consideration was an essential element in a contract. The court however does not interfere with the freedom of contract and so long as the parties freely agree on the consideration, the court cannot rule that the consideration was not adequate. So long as there was an offer that was accepted, an intention to enter into a legally binding contract and consideration given for that property, then all the elements were satisfied and there was thus a contract that was capable of enforcement. In this case, the court looked at all the whole contract and the statement “… and good and valuable consideration, the sufficiency of which is hereby acknowledged” meant that both parties agreed to the on the amount of $1.00 for both the sale and the assignment. The appellant clearly understood what he was getting into and agreed to the amount of $1.00. If the statement was not expressly stated in the contract, then there would have been a question of whether the appellant was coerced to enter into the agreement with the defendant for the sale and assignment. Furthermore, this statement appears in both agreements. Ethical Decision Making The principle that consideration need not be adequate is a well-stated principle. There are values that prevent the principle from being that consideration should be adequate. Firstly, when the parties are contracting, there courts appreciate privity of contract. The parties are also free to contract on terms that they agree on. If the courts were then to go and rule that the consideration given by a party does not match the value of that property or service, they would be interfering with the freedom of contract. Secondly, when parties are entering into an agreement that involves love and affection, there is the aspect of good faith. Love and affection is adequate consideration. If the amount is assessed according to the market value or otherwise of that property, then parties could rescind contracts at will and argue that there the reason is that consideration was not adequate. Thirdly, it is the responsibility of the seller to ensure that he gets the correct amount that he or she feels is equal to the value of the property. Due diligence is required on the part of the seller to ensure that he gets the correct amount and it is not for the court to do so for an ignorant seller. References Thelma Agnes Smith v. David Phillip Rilley Court of Appeal of Tennessee, Eastern Section at Knoxville, 2002. Tenn. App. LEXIS 65. Fisher, M., & Greenwood, D. (2011). Contract law in Hong Kong (Expanded 2nd ed.). Aberdeen, Hong Kong: Hong Kong University Press. McCracken, C. (1999). Hegel and the Autonomy of Contract Law.Texas Law Review, 77(3), 719. McKendrick, E. (2012). Contract law: Text, cases, and materials (5th ed.). Oxford, U.K.: Oxford University Press. Wishart, M. (2015). Contract law (Fifth ed.). Read More