Is There a Contract between Dr Doe and Giant Drug Company - Assignment Example

Contract Memo Name Institution MEMO From: Legal advisor To: Francis Stein Date: 12 September 2013 Re: Is there a contract between Dr. Doe and Giant Drug Company? There is no doubt the discussion between Francis stein and Dr. Doe brings about an issue concerning the offer Dr. Does made. From the discussion between the Stein and Doe, it is apparent that both individuals currently have a disagreement that has pit Dr. Doe and Stein, the president of Giant Drug Company. Dr. Doe offered Stein an offer, but he accepted another offer from Marks Drugs. As a starting point of the case, the issue at hand is whether Dr. Doe made a contract with Giant Drug Company during their discussion and exchange of information about Doe’s willingness to work for the company. The issue will serve as primary pivot in the analysis of the case and formulation of recommendation for Stein on how to handle the contract Dr. Doe just signed with MARK drugs, a rival in the drug industry. At the core of the case, is the issue of whether Dr. Doe has a contract with Giant Drug Company because Stein had sent some a letter accepting Dr. Doe’s offer. Consistent with many cases of contract, several elements of the contract are present and contribute to the issue at hand. With the need of bringing Dr. Doe onboard his team, Stein raises concern whether there is a contract between him company and Dr. Doe. This issue has significant importance because it introduces a new trajectory in the case between Dr. Doe and the Giant Drug Company. That Stein sent Dr. Doe a letter accepting the offer makes him believe that Dr. Doe is obliged to work for Giant Drug Company. The answer to this issue requires considerable analysis though. Determining the issue of the case requires a rigorous evaluation of the rules applying to the case. Laws of contract revolves around the enforcement of promises between two or more entities. In any situation where individuals enter into a contract, there has to be assumption of liabilities. At the start of the contract is an offer where on entity must provide the other entity with an offer. In contract law, a willingness to enter into a bargain with a company or individual meets the requirements of an offer, where the person receiving the offer, can assent to the offer making the contract binding. When an entity makes an offer, one must understand and expect that offer to bind both entities when accepted. In the case of Storer vManchester City Council (1974), cited by MacMillan and Stone (2012), the court of appeal determined that the Council offer to sell some houses was, binding as all the storer needed was to sign and return the sale agreement. Acceptance of offers is another important element that finds significance use in analysis of case laws. When one entity makes an offer, the intent to enter into a bargain is not binding unless the entity receiving the offer accepts the offer. In simple terms, accepting an offer means agreeing to the terms of the offer as entity making the offer stated. When accepting an offer, the entity making the acceptance has a choice of doing so using words or action. In the case of Brogden v Metropolitan Railway Company (1871), the entity receiving the offer accepted the offering via performance (MacMillan & Stone, 2012). Because acceptance of the offer requires the acceptance to mirror the offer, the offeree does not need to change any elements of the offer. A change in elements of an offer changes the angle of law of contract. When an entity makes an offer, the entity receiving the offer can agree to the offer, query the offer, add new terms, or change existing term in the offer. Acceptance of the offer makes the offer-binding, while querying the offer does not change the validity of the offer. In one case, Harvey v Facey (1893) one party sent information to the other party for enlightenment purpose, and this did not change the offer (MacMillan & Stone, 2012). In fact, such information does not require any action from both parties as it does not change the condition making the offer. In addition, communication during the making of offer and acceptance of offers are integral to resolving the current issue about the hiring of Dr. Doe. Because an offer is an agreed bargain, the entity making the offer must make effective communication about the offer. The same is true with the entity accepting the offer as the entity making the offering must be aware that an offer has been accepted. An important element underlying the making of offers is meeting of minds, where both parties must be aware of developments around the offer. This means that at no point should one entity decide to act without information the other party with regard to the offer. When accepting an offer, the entity assenting to the offer must do so with words or conduct that manifest its acceptance of the offer. The case of Day Morris Associates vVoyce (2003) demonstrate that an entity’s conduct can highlight the objective inference about their stand on the offer (MacMillan & Stone, 2012). Another vital rule involves the change of mind where an offeror changes his or her mind about an offer. In some cases, the person making the offer may indicate the period when an offer is open. In such a case, the person receiving the offer must make sure he or she responds to the offer before the lapse of the period. However, the offeror may change his mind before the end of the period and withdraw the offer. Withdrawing is acceptable as long as the offeree has not accepted the offer. When an offeror revokes an offer, there is need for actual communication that would inform the offeree of the cancellation of the offer. Communication of the cancelation must not necessary be through the offeror alone, but a competent person can communicate the cancellation, as well. There are cases where an offer lapses because the time the offeror stipulated has ended. In other cases, an offer is deemed to have lapsed if the offeree does not respond to the offer within a reasonable time. The emphasis here is that the offeror cannot wait for the offeree to accept the offer after a long time. Because the offeror need not to make the offerree wait for an offer forever before he or she assents to the offer. A lapse of considerable time before an offeree accepts an offer makes the offer invalid. On the other hand, using the postal service to accept an offer has a special requirement. In the case of Adams v Lindsell(1818) and Household Fire Insurance vGrant(1879) the court upheld the acceptance of an offer is complete with an offerree post the later (MacMillan & Stone, 2012). This rule removes the issue about delays in posting or letter never reaching its destinations. Analysis of the case The question of whether Dr. Doe has a valid contract with Giant Drug Company requires a careful analysis of the case using the aforementioned rules. From the case, it is evident that Dr. Doe made an offer to work for Stein’s company. His requirement was straightforward. Dr. Doe wanted to work as a research manager for 4 years at an annual pay of $500,000. Dr. Doe made the offer to Stein, the president of the firm. The offer is valid, made by competent persons, and entails a consideration for both parties. While the Dr. Doe would receive compensation for his work, Giant Drug Company would also benefit from marketing the new drug and deriving benefits from the process. While Dr. Doe made an offer, Stein did not accept the order at first, but he queried the rate of remuneration. Dr. Doe had specified in his offer that he would need a salary of $500,000 a year, but Stein thought that the salary was very high. He thought that perhaps Dr. Doe would work for a salary lower than $500,000. Consequently, he queried if Dr. Doe could work for $300,000. In contract law, exchange of information is a common thing and does not require action from both parties. Suggesting a lower salary in this case did not constitute rejection of offer, as it would appear. There is an important perspective in this case—that of counter offers. In the case, Stein asked Dr. Doe whether he could work for a salary of $300,000, but this move was not a counter offer. It remains a query on the offer, which does not change the terms of the offer Following the conversation of Dr. Doe and Stein, the offeror did not revoke the offer though he did not wish to work for something less than the amount he stated in his offer. The statement Dr. Doe issued to Stein does not constitute a revocation of an offer. The statement was just a reaffirmation of his offer. In relation to the communication of Dr. Doe and Stein, it is vital to note that Stein did not reject the offer when he said that he was no longer interested in hiring Dr. Doe. However, Stein sent a letter to Dr. Doe accepting his demands in the offer. Using the postal acceptance rule, it is arguable that Stein accepted the offer Dr. Doe offered and both parties where had a legal commitment to honor their side of bargain. The acceptance of the offer did not require any other communication mode, unless something better than postal service (MacMillan & Stone, 2012). Because Dr. Doe used the postal address, Stein acceptance of the order was complete just when he posted the acceptance letter. Conclusion As to whether there is a contract between Dr. Doe and Giant Drug Company, the answer is yes. Dr. Doe did make a contract with Stein because the offeree accepted the offer through a letter he posted through the postal service. Stein did take some days before accepting the offer because he queried the offer. While he asked whether Dr. Doe could take a lower salary, he did not change the terms of the offer. On the other hand, Dr. Doe did not revoke the offer and this paved way for its acceptance. Stein can force Dr. Doe to work for Giant Drug Company because the researcher has a contract with the company. His offer to work as the vice president and the head of research is still valid and this is the basis of Stein’s acceptance of the offer. By accepting to work for the MARK drugs, Dr. Doe breached the contract with Giant because the Stein accepted the offer through a mail he sent him through the postal address. The fact that Dr. Doe did not read the mail before accepting to work for MARKS does not nullify the contract he entered with GIANT. A contract was made after Stein signed the letter accepting to have Dr. Doe as vice president and head of research at the salary he stipulated. Because of this valid contract, Stein can compel Dr. Doe to work for the company and not for its competitor MARK Drugs. Remedies Available Under the Contract From the case of Stein and Dr. Doe, there is no doubt Dr. Doe has breached the contract by agreeing to work for MARK drugs. The non-breaching party, Giant Drug Company needs a remedy for the breach of contracting being that Dr. Doe has signed a contract to work with MARK drugs. A court may choose to award a non-breaching party a remedy from an array of remedies. There are times when the court can order a breaching party to pay the non-breaching party a certain amount of money translating to the loss the other party suffers(MacMillan & Stone, 2012). However, some remedies requires performance rather pay of loss. The most effective remedy for the case is that of specific performance where the court orders Dr. Doe to work for the company. This remedy will enforce the initial promise of Dr. Doe. This remedy is fit because it is not possible to quantify the opportunity Giant will lose to MARK should Dr. Doe work the later. Ordering Dr. Doe to work for Giant is a reasonable remedy for the case. Reference MacMillan, C. & Stone, R. (2012). Elements of the Law of Contract. London: University of London. Read More