Reference no: EM131602936

CASE: Sam Stevens lives in an apartment building where he has been working on his new invention, a machine that plays the sound of a barking dog to scare off potential intruders. A national chain store that sells safety products wants to sell Sam's product exclusively. Although Sam and the chain store never signed a contract, Sam verbally told a store manager several months ago that he would ship 1,000 units.

Sam comes home from work one day and finds two letters in his mailbox. One is an eviction notice from his landlord, Quinn, telling him he has to be out of the apartment in 30 days because his barking device has been bothering the other tenants. It also states that Sam was not allowed to conduct a business from his apartment. Sam is angry because he specifically told Quinn that he was working on a new invention, and Quinn had wished him luck. The second letter is from the chain store, demanding that Sam deliver the promised 1,000 units immediately. 

Sam Stevens lives in an apartment building where he has been working on his new invention, a machine that plays the sound of a barking dog to scare off potential intruders. A national chain store that sells safety products wants to sell Sam's product exclusively. Although Sam and the chain store never signed a contract, Sam verbally told a store manager several months ago that he would ship 1,000 units.  

Sam comes home from work one day and finds two letters in his mailbox. One is an eviction notice from his landlord, Quinn, telling him he has to be out of the apartment in 30 days because his barking device has been bothering the other tenants. It also states that Sam was not allowed to conduct a business from his apartment. Sam is angry because he specifically told Quinn that he was working on a new invention, and Quinn had wished him luck. The second letter is from the chain store, demanding that Sam deliver the promised 1,000 units immediately.

A. In order to prove that a valid contract exist between Sam and the chain store various elements must be present. A contract is formally defined as a promise or set of promises for the breach of which the law gives a remedy or the performance of which the law in some way recognizes a duty. (Kubasek, et al., 2012) The four elements of a contract are the agreement, the consideration, contractual capacity, and a legal object.

The first element of agreement would be deemed to exist if an offer by one party, called the offeror, to enter into a contract and an acceptance of the terms of the offer by the other part, called the offeree. The second element of consideration would be deemed to exist if what the bargained-for exchange or what each party gets in exchange for his or her promise under the contract was made. The third element of contractual capacity would be deemed to exist if Sam has the legal ability to enter into a binding agreement. Most adults over the age of majority have capacity; those under the age of majority, people suffering from mental illness, and intoxicated persons do not have the capacity to enter into a binding agreement. Fourth element of a legal object would be deemed to exist if the contract is not either illegal or against public policy.

If the elements of the contract did exist between these parties, there could still be some possible reasons why a contract might not be valid based on facts not present in the scenario. For example, if Sam was a minor at the time he made the agreement with the chain store, the contract would not be valid because of the element of contractual capacity. If the chain store did not clearly state in their verbal agreement what Sam would get in return for providing one thousand units of his product, the contract would not be valid under the consideration element. Another possible reason why a contract might not be valid would be if the product Sam was providing was made illegally or against public policy. The case does not state exactly what Sam was creating for the chain store and if the product was made illegally it could void the contract. 

B. Even if there is not a valid legal contract between Sam and the chain store, there may still be a quasi-contract or elements of what is called a promissory estoppel. A quasi-contract, sometimes called an implied-in-law contract, is defined as a court-imposed contractual obligation to prevent unjust enrichment. In this case, a quasi-contract may exist if Sam was provided with compensation previously to providing the product or if the chain store was planning on selling the product without providing Sam with the appropriate compensation for his product. 

A promissory estoppel is defined as the legal enforcement of an otherwise unenforceable contract due to a party's detrimental reliance on the contract. The principle might apply to this case if one party makes a promise knowing the other party will rely on it, the other party does rely on the promise, or if the only way to avoid injustice is to enforce the promise.

The promissory estoppel may be relevant to this case if we knew more information. For example, we do not know if the chain store has already presold or advertised Sam's product, which would be deemed as the chain store relying on Sam's product to produce 1000 units. If the store did presell or advertise we do not know if Sam was aware of this. 

C. The rights and obligations of both the landlord and the tenant depend upon the terms of their contract. Such a contract may be verbal or in writing under a standard residential lease agreement. Some facts that may support Sam is in breach of that contract are if he breached the covenant of quiet enjoyment because of the other tenants' complaints. Some facts that may support that Sam is not in breach of contract are the fact that the landlord knew he was developing a new invention and even wished him luck. 

D. Based upon these rights and obligations, Sam's landlord has grounds to evict him because he violated the covenant of quiet enjoyment. It is the landlord's responsibility to ensure the covenant of quiet enjoyment and if Sam is causing noise that violates this the landlord must quickly fix the problem so the rest of the tenants do not leave the property. 

E. Some defenses Sam might raise if his landlord tries to evict him is the right to appeal because the landlord never gave Sam the option to fix this problem. If the landlord had notified Sam of the complaint he could have fixed the noise problems.