The basic elements of a contract are offer, acceptance and consideration. In this instance, the two parties have agreed to a specific good (consideration) and a specific price. Some specs were written down informally, but there is no evidence that a formal written contract with all of the details exists.
The original presentation of the order was an invitation to treat. Sonya and Camille then set out the price and the specs for the order. The latter were in writing. Sonya is the offeror here, however, and Camille must accept. At issue is whether this occurred. It is not known whether or not the entire contract exists in writing — it is assumed that this is not the case. If the only writing that exists does not contain all of the terms, then there is no offer and acceptance here, because for a contract of this size it needs to be in writing. While Sonya did say “I will get started right away,” that cannot be proven in court. If the entire terms of the contract are not in writing, then no enforceable contract exists. Under the UCC, partial integration would be a situation where they had a written contract and wanted to add additional terms (such as the type of yarn) but where the original contract is oral when it needed to be, by law, in writing, then no enforceable contract exists.
The prior course dealings would determine what a contract looks like between these two, for example in determination contract by performance. . If there was contract by performance, that would have required Camille to pay Sonya the usual downpayment. That this was normal, but did not occur this time, was a major indication that Camille did not feel that there is an enforceable contract. This may be moot because the other contract terms were not in writing, but there would definitely be a scenario where prior conduct would determine contract by performance. The tricky part of the downpayment is in the case wording — that Camille “forgot.” That means that she intended to make the downpayment, which means that she intended to be bound in a contract. However, there is no evidence of this, and Camille would reasonably just say that she did not pay because she never intended to be bound by contract.
Sonya also has a legal obligation to mitigate her damages. That would mean that she should have phoned Camille to verify that it was okay to start work. Sonya also failed to secure a written contract prior to starting work. These are just two of the steps that Sonya could have undertaken to mitigate her risk in this situation, and both steps are entirely reasonable and part of normal course business. Indeed, when Camille did not pay the downpayment, that should have alerted Sonya again about an issue. That Sonya did nothing to minimize her risk will be looked upon unfavorably by the court.
The ethical issues are distinct from the legal issues — the law isn’t based on ethics. But ethically, these parties had built a business relationship and then this dispute has done damage to that. Sonya may not have been dealing fairly, as she should have reasonably suspected that without a clear agreement — and one in writing — that there was a contract. Sonya may not have been acting in good faith, though it is tough to make that determination from the information in the case — she may just have been sloppy with her communication with the customer.
As noted on the “forgot” comment, Camille is also in a situation where if she wants to pretend there was no contract, she could, but she would have to lie in order to avoid admitting that she intended there to be a contract. So Camille will have to be dishonest in order to win this case — full honesty would mean indicating that she intended to be bound by contract, and that would mean that she will have to perform, since Sonya has. So how the case plays out will have a lot to do with the ethical position that each of the parties undertakes.
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