Overview
Write a 2–page executive briefing of a selected business-related U.S. case pertaining to the topic of contract law.
By successfully completing this assessment, you will demonstrate your proficiency in the following course competencies and assessment criteria:
• Competency 1: Articulate the importance, context, purpose, and relevance of law in a business environment.
o Summarize the facts and ruling of a legal case.
• Competency 2: Evaluate the role of contracts in commercial transactions.
o Analyze how a legal case could impact businesses.
o Explain how a legal case could impact a specific organization.
• Competency 5: Develop information literacy skills as applied to business law.
o Exhibit information literacy skills as applied to business law.
CONTEXT
Contracts are the heart and soul of commercial transactions. Different types of contracts bind parties together in business dealings. Review contracts that you have signed recently-a lease, an employment agreement, an extended warranty-to examine not only the language but also the scope of these agreements. Examine the language in the contract that outlines how disagreements will be resolved, and the penalties that adhere to either party for breach of the contract.
Read the Assessment 2 Context document (attached/provided) for important information related to the following topics:
• Importance of Contracts.
• Consideration, Capacity, and Legality.
• Breach of Contract.
• Creditors, Debtors, and Bankruptcy.
• The New Frontier: E-Contracts.
Questions to consider:
To deepen your understanding, you are encouraged to consider the questions below and discuss them with a fellow learner, a work associate, an interested friend, or a member of the business community.
• What is the difference between an agreement and a contract? What is the difference between an offer and a contract?
• If you sign a purchase agreement to buy a house but do not give the seller a deposit, and, after signing, you change your mind before you move in, are you bound by your agreement?
• If you offer $500,000 for a person’s house and the person responds that he or she wants $500,001, do you have a contract?
• In a contract for the purchase and sale of a house, can the parties agree that the price for the house will be the market value of comparable houses on the day of closing?
• Are there situations when someone can be bound to keep their promise even though they received nothing in return for their promise?
• If the parties sign a purchase and sale agreement for the purchase of a house, and the house is destroyed shortly before the deed to the house is signed by the seller, who bears the risk of loss?
• In the modern world, with the growing maturity of young people, are rules protecting minors from the enforcement of contracts archaic?
Assessment Instructions:
For this assessment, you will first select an actual business-related U.S. legal case, pertaining to the topic of contract law, based on briefly conducting associated research. Based on that, you will then select an organization that you believe would be impacted by that legal case. Having completed both of these tasks, you should assume you’re a senior manager in the organization you selected, and that you were asked to perform an analysis of the legal case and to write an executive briefing for the executive team of that same organization. Your executive briefing should include a summary of the case, as well as an evaluation of how the case impacts the organization.
The purpose of this format is two-fold:
1. To give you the opportunity to research and investigate a real court decision.
2. To challenge you to think about the business implications of the case, and specifically how the case will impact an actual organization.
In your case law analysis, you must be able to navigate the court’s decision, and summarize and evaluate it. You may choose any business-related court case, either state or federal, as the basis for your case law executive briefing, as long as the case is applicable to the assessment topic. You are expected to conduct your own independent research to locate and evaluate the applicability of cases. A few appropriate case law websites are recommended for you in the Resources, but you are not limited to using cases from these sites.
For this assessment, use credible legal research databases and online resources, research federal and state court cases, and select any business-related case that has been decided by a state court, a federal court, or the United States Supreme Court. Then select an organization (potentially the organization for which you work) that you believe the selected case might impact. Write an executive briefing that addresses the following:
1. Articulate the context and relevance of law in a business environment:
a. Identify the parties who are before the court.
b. Provide a brief background and context associated with the case. Summarize the facts in no more than 2-3 paragraphs.
c. Identify the specific disagreement between the parties.
d. Explain the ruling of the court and its business relevance in no more than 1-2 paragraphs. Was there a dissenting opinion? If so, explain why some of the judges or justices disagreed with the majority in the decision.
2. Evaluate the business impact of the case:
a. Summarize your analysis of how the case will impact businesses in general, including both positive and negative impacts.
b. Indicate the organization you selected as potentially impacted by the case and why you selected that organization.
c. Explain how the case will impact the specific organization you selected, such that the executive team will understand the implications of the legal decision.
Based on your executive audience, your executive briefing should be no more than two pages, and should be well organized and written in clear, succinct language. Follow APA rules for attributing sources that support your analysis and conclusions.
Academic Integrity and APA Formatting
As a reminder related to using APA rules to ensure academic honesty:
1. When using a direct quote (using exact or nearly exact wording), you must enclose the quoted wording in quotation marks, immediately followed by an in-text citation. The source must then be listed in your references page.
2. When paraphrasing (using your own words to describe a non-original idea), the paraphrased idea must be immediately followed by an in-text citation and the source must be listed in your references page.
Suggested Resources
The following optional resources are provided to support you in completing the assessment or to provide a helpful context. For additional resources, refer to the Research Resources and Supplemental Resources in the left navigation menu of your courseroom.
Capella Resources
1. Assessment 2 Context.(attached/provided)
2. Analyzing a Case Law | Transcript.(attached/provided): Throughout this course, you will be required to submit case law analysis papers. This multimedia presentation points out key areas of a case law. Use this presentation to help you complete your case analyses. Refer to this media as often as you need to.
3. Business Law Foundational Concepts | Transcript.(attached/provided): This media piece offers interactive flashcards that you can use to learn (or review) foundational terms and concepts in business law. Refer to this study aid often and as needed.
Library Resources
The following e-books or articles from the Capella University Library are linked directly in this course:
DuBoff, L. D. (2004). The law (in plain English) for small business. Naperville, IL: Sphinx Publishing.
Course Library Guide
A Capella University library guide has been created specifically for your use in this course. You are encouraged to refer to the resources in the BUS-FP3021– Fundamentals of Business Law Library Guide to help direct your research. Pay particular attention to the Capella University Library Legal Research Library Guide linked within.
Internet Resources
Access the following resources by clicking the links provided. Please note that URLs change frequently. Permissions for the following links have been either granted or deemed appropriate for educational use at the time of course publication.
Nolo. (2013). Nolo law for all. Retrieved from http://www.nolo.com
This resource provides helpful background on a range of legal issues. You may find the Free Legal Information section of the site particularly helpful.
Your assessments throughout this course will be case law analysis papers based on real-world court decisions you will choose and research independently. The following suggested resources provide helpful methods of locating relevant cases:
FindLaw. (2013). US Supreme Court opinions. Retrieved from www.findlaw.com/casecode/supreme.html
Cornell University Law School – Legal Information Institute (LII). (n.d.). Supreme Court: Most recent decisions. Retrieved from www.law.cornell.edu/supct/
Nolo. (2011). US Supreme Court center. Retrieved from http://supreme.nolo.com/
Oyez, Inc. (2011). U.S. Supreme Court media – Cases. Retrieved from http://www.oyez.org/cases
Bookstore Resources
The resources listed below are relevant to the topics and assessments in this course and are not required. Unless noted otherwise, these materials are available for purchase from the Capella University Bookstore. When searching the bookstore, be sure to look for the Course ID with the specific –FP (FlexPath) course designation.
Miller, R. L., & Cross, F. B. (2018). The legal environment of business: Text and cases (10th ed.). Boston, MA: Cengage.
Solution
Case Law Analysis: Contract Law
Contracts are part of everyday life; people enter into contracts such as employment, lease, and insurance agreements. Some contracts are formal, while others are informal, and contracting parties can seal them through a verbal agreement. Sometimes, contracts can be complex, requiring proper drafting and signing against the terms of conditions, strategies for resolving disagreements, and remedies for a breach of the contract. Sometimes, people involved in a contract lack adequate knowledge of the law governing valid arrangements, which explains why many business transactions end in legal suits, as portrayed in the Lucy v. Zehmer case.
Involved Parties
The Lucy v. Zehmer case involved two parties in a contract; Zehmer and Lucy. Zehmer was the defendant, while Lucy was the plaintiff that filed the lawsuit.
Summary and Facts
This case addresses a breach of business contract by one party following a signed agreement to transact a piece of land. Notably, Zehmer agreed to sell land for $50,000 to Lucy while the two were out drinking together before Christmas (“Lucy v. Zehmer,” n.d.). The two parties drafted the contract on a napkin, after which the plaintiff offered to pay an amount that would seal the agreement. However, the defendant refused to pay and argued that he was jesting about selling the land. A disagreement arose on whether there existed a valid contract between the two, which led Lucy to sue Zehmer for breach of the agreement.
Lucy’s case was presented to the Supreme Court of Virginia, where the matter was heard and deliberated. The court held that even if the defendant entered into the contract in jest, his acts and statement warranted Lucy in believing that the agreement represented a serious and good faith sale and purchase (“Lucy v. Zehmer,” n.d.). The court also held that if a party’s words and acts to a contract, reasonably interpreted, manifest an intention of agreement, then his unexpressed intentions are immaterial (“Lucy v. Zehmer,” n.d.). In this scenario, Lucy interpreted Zehmer’s action of drafting the contract as an intention to sell the land, but there was no way she could know that the defendant was jesting. Therefore, based on this reasoning, the judges concurred that the contract was valid.
Business Relevance
This case is relevant in the business environment because it enlightens parties on the enforceability of agreements and factors that could result in a breach of contract. As the literature suggests, there are several types of causation scenarios for a contract breach, including actions existing at the time of an agreement or before the actual breach (O’Gorman, 2017). Scholars also note that, in many scenarios, parties fail to file for legal enforcement of the breached contracts because of relationship factors (Johnson & Sohi, 2016). Some of these issues are visible in the selected case whereby Zehmer breaches a deal at the time of its formation without even realizing it. Therefore, this case helps individuals understand some of the actions that bind them to a contract, such as drafting an agreement and the available legal remedies for a contract breach.
Impact on Business in General
Positive and Negative impact
The Supreme Court of Virginia’s ruling on the selected case may positively and adversely impact business in general. On the one hand, the verdict may guide firms to file for remedies for breach of contracts that arise from unprecedented revocation of an agreement by one party without following the pre-established steps. On the other hand, the ruling may encourage firms that conduct shady business to get remedy for contract breach in scenarios where the court fails to analyze their historical dealings as is in Lucy’s case.
Impact on Organization
I chose the current organization where I work for this analysis because it is often involved in business contracts with different clients. The firm may benefit from this ruling because clients’ external acts to indulge in a transaction would substantiate a deal. With this in mind, the firm can easily sue clients for breach of contract when their intentions are ruled as immaterial.
References
Johnson, J., & Sohi, R.S. (2015). Understanding and resolving major contractual breaches in buyer-seller relationships: A grounded theory approach. Journal of the Academy of Marketing Science, 44(1), 185-205. https://doi.org/10.1007/s11747-015-0427-8
Lucy v. Zehmer (n.d.). Justia US Law. https://law.justia.com/cases/virginia/supreme-court/1954/4272-1.html
O’Gorman, D.P. (2017). Contracts, causation, and clarity. Law Publications. https://lawpublications.barry.edu/cgi/viewcontent.cgi?article=1125&context=facultyscholarship
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