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Contracts2

Copyright © 2007, Gerald Bamberger

 

Rick was the star quarterback of the New Moxie Porktossers. It was only a few days to the Superbowl, and, Rick gave Lydia his “lucky” jersey to wash for the big game.  Although Rick was unaware of this, Lydia would always take Rick’s laundry to Larry’s Wash and Fold; Larry, the proprietor, was an old high school friend, and always did a great job with the laundry.

Later that day, Lydia learned that Larry had had a heart attack, and that Larry’s Wash and Fold was being operated by Larry’s brother, Louie.  Lydia promptly phoned Louie to explain how important the jersey was.  “Rick absolutely insists on wearing this particular jersey at the Superbowl," she told Louie. "He can't play without it. If Rick can’t play, his contract won’t be renewed, and there will be a huge lawsuit. It's extremely important that Rick get his jersey on time and in perfect condition.”  Louie assured her, “Don’t worry; it’ll be ready tomorrow.”

In fact, another employee of Larry’s Wash and Fold, having recognized it, had already sold Rick’s jersey on eBay.  When the story broke, Rick suffered a psychotic episode, and was unable to play at the Superbowl.  The Porktossers lost, and did not renew Rick’s contract.

If Rick brings an action against Larry’s Wash and Fold based on the non-renewal of Rick’s contract, Rick will lose, because

(a)     Rick’s consequential damages were unforeseeable.
(b)     Rick’s consequential damages were foreseeable to Larry’s Wash and Fold, because Louie had assumed this risk; but Rick was not in privity of contract with Larry's Wash and Fold.
(c)     Rick had not vested as a third part beneficiary of the contract, because he did not even know the contract existed.
(d)     The obligation of Larry's Wash and Fold to perform was excused due to Larry's illness.

 

To see Professor Bamberger explain the answer in detail click here

 

 



 


 
 
     

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