Business Law - Henrietta, Tommy and Annette - Essay Example

Business Law The Chauncey case: Chauncey’s parents had issued a in favor of their son’s boss in order to escape legal proceedings due to embellishment of funds by the boy. Chauncey was found to have stolen $2000 from the store’s cash while working as a part-time staff. The boss demanded that the parents issue a note for the value of $2000 failing which he would move to court against the boy. The parents obliged but subsequently failed to honor the note. The issue here is whether the boss has any legal remedy to enforce the payment of the note. It appears that he has no legal remedy to enforce it due to the following conditions. It should be noted here that the text of the note is not given. If the note is an unconditional offer to pay the amount, it becomes a negotiable instrument under Article 3(104) of the Uniform Commercial Code. If that is the case, the parents would be obliged to pay since it is an unconditional promise to pay under normal circumstances. But the parents can take recourse to Article 3(305) stating that the note was issued under duress. In other words, the Chauncey’s boss had threatened legal action against the boy unless a note was issued in his favor. Any parent would be morally obliged to agree to such a demand under such circumstances and hence can be done under duress. On the other hand if the note contained a condition that no action would be taken if a promise to pay the amount was undertaken, then it ceases to be a negotiable instrument and could be considered to be a contract. Here again, Chauncey’s parents can take recourse to statutes and make the contract void. “In other words, although two parties may have come to an agreement, it is not recognized as a legal contract. Perhaps the simplest example of a void contract is a contract formed in which one party agrees to perform an illegal act” (Contract Law). Chauncey had committed theft which is illegal. Trying to cover up an illegal act through a contract is not legal and hence voidable. Hence, it appears that the boss cannot enforce the promise in both instances, as a negotiable instrument or a contract. The risk in not honoring the note is that the boss would move to court to recover the amount. This could be embarrassing and harmful to both Chauncey and his parents. The Henrietta case: Henrietta was unofficially employed in the Smith household, which started off as an extension of friendship the former had with the latter (elderly couple). Even though no formal agreement of pay was discussed, Henrietta requested compensation for her services after a period of three years. The question here is whether she is entitled to pay even though no formal agreement existed between the Smiths and Henrietta. In the United States minimum wages are covered under the Fair Labor Standards Act. The said act specifies the classes of employees covered under this statute. According to a publication by the Department of Labor, domestic labor along with babysitters and cooks are covered under the purview of the act and comes under the area of individual coverage (Department of Labor 1). According to section 6(d)(4) of the act, domestic help is entitled to the minimum wages of a worker in the United States. It does not apply to casual baby sitters or those acting as companions to old people. But the facts of the case indicate that Henrietta was engaged in many of the domestic chores in the household which could provide her with rights to at least minimum wages under law. She can ask for her remuneration under the provisions of ‘back pay’ where an employer has to pay the difference between actual pay and minimum pay. In her case she could probably be awarded the full minimum wage she was not paid any compensation at all. There is a statute of limitation of a period of two years in which case Henrietta can be awarded minimum pay for at least two of the past three years. But she should be able to prove that she had indeed worked in the capacity of domestic help during the said period. But the problem in the country is that domestic help is largely unorganized and Henrietta may not receive any collective bargaining or union support. She may have to rely on the courts on her own and without outside help. Tommy and Annette case: Tommy wanted refund from the hotel where he booked a room to watch an award being given to his favorite actress Annette. It was possible to watch the event from his hotel room, but unfortunately the event was cancelled and Tommy wanted the booking to be canceled and the advance of $500 returned. Booking a room is a valid contract between the hotel and the guest. Here the question is whether the hotel had promised Tommy that a room will be provided to for the purpose of exclusively viewing the award ceremony or just a room which has a view of the venue. In the former case, Tommy may have recourse against the hotel and be entitled to get the refund on advance. It appears that Tommy had booked the room just because it had a view of the venue. In other words, the hotel did not promise that the room is booked subject to the event taking place. So, the hotel does not seem have gone back on its promise of providing a room which has a view of the awards ceremony. The hotel authorities had acted in good faith and fairness by providing a suitable room. It was not the fault of the hotel that the ceremony did not take place. It would depend on the policy of the hotel regarding cancellation which will result in paying back the advance. If hotel policies do not allow refund and if the same was intimated to Tommy, he is not entitled to get back his advance. But if the viewing of the award ceremony was a pre-condition to booking, then the situation may turn out differently. Here also, if there was a clause stating that cancelation does not alter hotel policies, it will be difficult for Tommy to get a refund. But Tommy, as a plaintiff could take recourse in the three fundamental factors of contract law regarding protection, namely expectation, reliance, and restitution (Knapp 201). Protection refers to the gain to the plaintiff (Tommy in this case) if the contract had gone ahead as agreed. Reliance refers to the loss the plaintiff would incur if the contract was not fulfilled and restitution refers to any damages or injury in case of cancellation of the contract. But Tommy does not in any way profit in economic terms from the contract and it would be difficult to gain a favorable verdict in court. He only obtains mental satisfaction or gain. Unless the hotel agrees to the refund, Tommy is not in a position to get the refund. Phil and George case: Phil offers George a certain sum of money in an apparent attempt to rid the latter’s drug habit (of smoking marijuana). The basic premise in the validity of any contract (in the United States and most other countries) is the concept of consideration. In this instance, Phil has made an offer to George, where the latter benefits by getting $100 in the short term and obvious health benefits in the long term. But the question arises to what consideration or benefit Phil attains from this particular contract. “One traditional test for consideration is the benefit/detriment test. If the promisor [Phil] has received some benefit for the making of the promise, or if the promisee has suffered some detriment in connection with the making, the promise will be regarded as supported by consideration” (Knapp 205). This particular agreement will depend on any benefit that Phil had derived from George’s abstinence from smoking the drug. It will also depend on any detriment that may arise to George. On the whole, there is no evidence that Phil derives any sort of benefit from this act. There is no detriment to George and he actually benefits from fulfilling his part of the agreement. It appears that this was simply an agreement between fiends (or family members) in an effort to contain an addiction. In such an instance there is no valid contract here. On the other hand if Phil benefits from George’s abstinence then the matter would be different. For example, George could be a valuable employee and his habit is causing problems with his performance in the workplace. His abstinence could result in financial benefits to Phil. But unless George can prove consideration in a court of law, the contract will not be valid, and he cannot enforce the agreement. It will be considered void as there is not real consideration with regard to one of the parties (Phil) to the agreement or contract. References “Contract Law”. Law Library – American Law and legal information. 2009. 17 December. 2009 < http://law.jrank.org/pages/12504/Contract-Law.html> Department of Labor. “Fact sheet #14: Coverage under the Fair Labor Standards Act”. Department of Labor: Wage and Hour Division. 2009. 17 December. 2009 Knapp, Charles, L. “Contract Law”. Fundamentals of American Law. Ed. Alan B Morrison. Oxford University Press. 1996. Read More