Introduction to law and business transactions book the legal environment todaycase 10 7 (page 285 286)

NATIONAL ECONOMICS UNIVERSITY -*** - INTRODUCTION TO LAW AND BUSINESS TRANSACTIONS BOOK: THE LEGAL ENVIRONMENT TODAY CASE 10-7 (PAGE 285-286) Instructor: Class: Students: Assoc Prof Tran Van Nam Advanced Accounting 63 Nguyen Thi My Anh – 11210625 Le Chi Mai – 11219088 Hoang Thanh Thao – 11215372 Nguyen Hoai Thu - 11215540 Hanoi, November 2022 TABLE OF CONTENTS I Case Brief II Case Analysis Definition  Scenarios  Exceptions  Consideration  Elements of consideration About the contest  Participants  Rule Formation of contract  Offer  Acceptance  Consideration Enforceable contract formation Type of contract 10 Problems 10 Case law 12 Comparing with similar cases 12 8.1 Steelhead Townhomes, L.L.C v Clearwater 2008 Note Program, LLC 12 8.2 Bertelsen v Channel Bio, LLC .13 III Case conclusion & answers for question 13 IV Law Application: Vietnam Civil Code .14  Điều 119 Bộ luật Dân 2015 quy định hình thức giao dịch dân 14  Điều 400 Bộ luật Dân 2015 quy định thời điểm giao kết hợp đồng 14  Khoản Điều 404 Bộ luật Dân 2015 quy định giải thích hợp đồng 15 V References 15 This is a preview Do you want full access? 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Log in I Case Brief - Akansas – Missouri Forest Products, LLC (Ark-Mo), sells supplies to make wood pallets Mark Garnett is the owner of Ark-Mo - Blue Chip Manufacturing (BCM) makes pallets Stuart Lerner is the owner of BCM - Mark Garnett and Stuart Lerner went to a business together They agreed that Ark-Mo would have a 30% ownership interest in their future projects - Lerner formed Blue Chip Recycling, LLC (BCR), however, he allocated only 5% interest to Ark-Mo  Garnett objected - In “Telephone Deal", Lerner promised Garnett that Ark-Mo would receive a 30% interest in their future project in the Midwest => Garnett agreed to forgo an ownership interest in BCR - When Blue Chip III, LLC (BC III), was formed to operate a repair facility in the Midwest, Lerner told Garnett that he “was not getting anything”  Ark-Mo filed a suit in a Missouri state court against Lerner, alleging breach of contract II Case Analysis Definition  Scenarios o Past consideration (No new obligation) o Gift o Promise is illusory  Exceptions o Agreements signed by party  Option Contracts  Assignments  Promissory notes  UCC - Prior Consideration $500  Consideration Consideration in the form of something received or promised that convinced a party to the contract to make the deal Consideration usually is defined as the value (such as cash) given in return for a promise (in a bilateral contract) or return for performance (in a unilateral contract) As long as consideration is present, the courts generally not interfere with contracts based on the amount of consideration paid  Elements of consideration o Legally Sufficient Value: To be legally sufficient, consideration must be something of value in the eyes of the law The “something of legally sufficient value” may consist of the following duty to A promise to something that one has no prior legal The performance of an action that one is otherwise not obligated to undertake The refraining from action that one has a legal right to undertake (called a forbearance) Consideration in bilateral contracts normally consists of a promise in return for a promise, as explained earlier In a contract for the sale of goods, for instance, the seller promises to ship specific goods to the buyer, and the buyer promises to pay for those goods Each of these promises constitutes consideration for the contract o Bargained for exchange: The second element of consideration is that must provide the basis for the bargain struck between the contracting parties The item of value must be given or promised by the promisor (offeror) in return for the promisor's promise, performance, or promise of performance About the contest  Participants o Mark Garnett, an owner of Arkansas-Missouri Forest Products, LLC (ArkMo) o Stuart Lerner, an owner of Blue Chip Manufacturing (BCM)  Rule To make a submissible case for breach of contract, a plaintiff must establish: (1) a mutual agreement between parties capable of contracting; (2) valid consideration; (3) mutual obligations arising out of the agreement; (4) part performance by one party and prevention of further performance by the other; and (5) damages resulting from the breach of contract Accordingly, Ark-Mo must present substantial evidence to support each element Because the last two elements—breach and damages—are not disputed, our analysis will focus on the first three elements: Mutual Agreement between Parties; Valid Consideration; Mutual Obligations Lerner asserts Ark–Mo did not make a submissible case for breach of contract because there was no evidence of mutuality of agreement regarding the essential terms of the Telephone Deal Lerner argues the Telephone Deal between Lerner and Ark-Mo was nothing more than “a promise to negotiate further deals in the ‘future.’ ” We disagree There was substantial evidence in the record to establish that the terms of the Telephone Deal were capable of being made certain and that there was a meeting of minds between the parties regarding Ark–Mo's ownership interests in future projects This is a preview Do you want full access? 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Log in in the Midwest The terms of the Telephone Deal were that Ark–Mo would be entitled to a 30% ownership interest in future projects in the Midwest and that, in return, ArkMo would not pursue an ownership interest in BCR These terms are sufficiently definite to enable us to give them an exact meaning There was evidence at trial from which the jury could reasonably determine that the Telephone Deal was based upon the parties' long history of pursuing business together Formation of contract  Offer Garnett and Lerner agreed that Ark-Mo would have a 30 percent ownership interest in their future projects When Lerner formed Blue Chip Recycling, LLC (BCR), to manage a pallet repair facility in California, however, he allocated only a percent interest to Ark-Mo Garnett objected In “Telephone Deal", Lerner promised Garnett that Ark-Mo would receive a 30 percent interest in their future project in the Midwest, and Garnett agreed to forgo an ownership interest in BCR But when Blue Chip III, LLC (BC III), was formed to operate a repair facility in the Midwest, Lerner told Garnett that he “was not getting anything” Ark-Mo filed a suit in a Missouri state court against Lerner, alleging breach of contract The foregoing evidence was sufficient as a whole for the jury to determine that (1) Lerner and Garnett first agreed that Ark–Mo would have a 30% ownership interest in future CHEP projects, (2) they later changed their agreement to give Ark–Mo a 30% ownership interest in future CHEP projects in the Midwest and Ark-Mo would not pursue an ownership interest in BCR, and (3) the parties' actions from the formation of BC II until BC III was formed were consistent with those agreements A reasonably prudent person would be led to believe from the actions and words of Lerner and Garnett that the parties intended those agreements to exist between them Accordingly, there is substantial evidence, with probative force, upon the issue of whether there was a meeting of minds between the parties, from which the jury could have reasonably decided the case The fact that some terms of an agreement were not capable of ascertainment at the time the agreement was entered into, and these precise terms were to be determined by mutual agreement in the future when they became ascertainable does not make the contract unenforceable  Acceptance According to the terms of the Telephone Deal, Ark-Mo was obligated not to pursue any ownership interest in BCR in consideration of Lerner's promise to allocate Ark– Mo a 30% ownership interest in future CHEP projects in the Midwest In return, Lerner was obligated to give Ark–Mo a 30% ownership interest in future CHEP projects the parties would together in the Midwest Because both parties were held to an implied requirement to act in good faith and make reasonable efforts, the possibility that there might not be any more opportunities for CHEP projects does not render these mutual obligations illusory Therefore, we find Ark–Mo presented substantial evidence from which a jury could reasonably find mutuality of obligation existed in the Telephone Deal  Consideration Substantial evidence and reasonable inferences exist from which a jury could find that the Telephone Deal was supported by valid and sufficient consideration According to the Parking Lot Deal, Lerner and Garnett agreed to share profits and losses in their future projects with CHEP by Ark-Mo having a 30% ownership interest in the projects Later, when Lerner allocated only a 5% interest in BCR to Ark-Mo, Garnett simply could have accepted the 5% proposal, but he refrained from doing so Instead, Garnett asked Lerner whether Ark–Mo would then be entitled to a 30% interest in future CHEP projects if they are in the Midwest Lerner answered in the affirmative Thinking that would be the “best [he] could get at that point,” Garnett accepted Lerner's answer and made no further demand regarding BCR From the parties' exchange and conduct afterward, it is reasonable to infer that Garnett, on behalf of Ark-Mo, forwent its opportunity to have an ownership interest in BCR instead of having Lerner agree that Ark–Mo is entitled to a 30% ownership interest in the future CHEP projects in the Midwest To so was a detriment to Ark-Mo, as a promise, because Ark–Mo was not legally bound to forego its opportunity to have a 5% ownership interest in BCR, which is worth approximately $1 million Garnett, on behalf of Ark-Mo, could have accepted Lerner's 5% proposal and still attempted to have Lerner agree to the terms of the Telephone Deal However, Garnett chose not to so, and it is reasonable to infer that he made a strategic choice for the “best [he] could get at that point.” In other words, Ark-Mo, through Garnett, changed its position in reliance on Lerner's new promise We find this consideration a valid legal consideration that could sufficiently support a contract See Holt v Jamieson, 847 S.W.2d 194, 197 (holding that the plaintiff's forbearance from filing a mechanic's lien when he had a right to so constituted a valid legal consideration for a contract) Viewing the foregoing evidence and the reasonable inferences drawn from there in the light most favorable to the verdict, we find that Ark–Mo presented substantial evidence from which a reasonable juror could find that valid legal consideration supported the Telephone Deal Enforceable contract formation The Telephone Deal did not violate the parole evidence rule and was not barred by the BC II Operating Agreement Ark-Mo argues that the Telephone Deal was not an oral amendment of the BC II Operating Agreement Ark-Mo further argues that no provision of the BC II Operating Agreement prohibited a separate agreement based on This is a preview Do you want full access? 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Log in a personal promise by Lerner Ark-Mo argues that Lerner testified he controlled who would receive interest in CHEP opportunities and created a direct obligation for himself through his promises Lerner asserts there was no evidence of legal consideration for the Telephone Deal Lerner argues that Garnett did not specifically testify that he agreed to “forego” an ownership interest in BCR in exchange for a 30% ownership interest in future CHEP projects in the Midwest Lerner also argues that Ark–Mo had neither the existing ownership interest nor the right to an ownership interest in BCR to forego Lerner adds that he received no right, interest, profit, or benefit under the Telephone Deal The Telephone Deal was supported by valid and sufficient consideration Lerner and Garnett agreed to share profits and losses in their future projects with CHEP by ArkMo having a 30% ownership interest in the projects Later, when Lerner allocated only a 5% interest in BCR to Ark-Mo, Garnett simply could have accepted the 5% proposal, but he refrained from doing so Instead, Garnett asked Lerner whether Ark– Mo would then be entitled to a 30% interest in future CHEP projects if they are in the Midwest Lerner answered in the affirmative Thinking that would be the “best [he] could get at that point,” Garnett accepted Lerner's answer and made no further demand regarding BCR From the parties' exchange and conduct afterward, it is reasonable to infer that Garnett, on behalf of Ark-Mo, forwent its opportunity to have an ownership interest in BCR instead of having Lerner agree that Ark–Mo is entitled to a 30% ownership interest in the future CHEP projects in the Midwest To so was a detriment to Ark-Mo, as a promise, because Ark–Mo was not legally bound to forego its opportunity to have a 5% ownership interest in BCR, which is worth approximately $1 million Garnett, on behalf of Ark-Mo, could have accepted Lerner's 5% proposal and still attempted to have Lerner agree to the terms of the Telephone Deal However, Garnett chose not to so and it is reasonable to infer that he made a strategic choice for the “best [he] could get at that point.” In other words, Ark-Mo, through Garnett, changed its position in reliance on Lerner's new promise We find this consideration a valid legal consideration that could sufficiently support a contract the Telephone Deal Type of contract Informal Contract: These contracts are what most use daily An informal contract is an agreement, orally or written, usually of a simple nature Informal contracts, also known as informal agreements, can be legally binding, but it is much harder to enforce these in court Problems Ark-Mo argues the trial court erred in granting Lerner’s motion for JNOV because Ark-Mo had made a submissible case for breach of contract by proving with substantial evidence that Lerner orally agreed Ark-Mo would receive 30% ownership interests in future projects together with CHÉP in the Midwest In Point II, Ark-Mo argues the trial court erred in granting Lerner’s motion for JNOV because there was sufficient evidence of consideration to support the oral contract We agree Lerner argues that the terms of the contract were not definite because the contract did not specify the price that Ark–Mo was supposed to pay for its 30% ownership interest in future CHEP projects Lerner further argues that other essential terms were also missing, such as what future CHEP projects would entail, whether Ark–Mo's 30% interest would be voting or non-voting, where the term “Midwest” would encompass, who else would be involved in future CHEP projects, what type of business structure would be formed to operate future CHEP projects, what type of work would be performed by the members of the businesses, how much any members of the businesses would be paid for their salaries, and when and if distributions were to be made We disagree With the standards in mind, the terms of the Telephone Deal, which Lerner characterizes as fatally uncertain and indefinite, were made sufficiently certain and were supported by evidence at trial As the parties' words and acts expressed and manifested their intention, the parties pursued CHEP business together with a particular framework of ownership interests When the parties entered into the Telephone Deal, however, the price Ark–Mo would have to pay for its 30% ownership interest in a CHEP project was not capable of ascertainment because the capital needs for a future CHEP in the Midwest could not be identified at that time The fact that the Telephone Deal was without detailed terms, such as what a future CHEP project would encompass, who would be involved in a project, what business structure would be used, and what salary a member would be paid, does not make the contract too uncertain and indefinite to be enforced Although an oral contract's terms must be definite, those terms need not always be detailed Considering the evidence of the parties' prior dealings and conduct, the terms of the Telephone Deal are sufficiently definite without those detailed terms The terms are that Ark–Mo would not pursue any claim of ownership interest in BCR but that Ark– Mo would receive a 30% ownership interest in future CHEP projects done together in the Midwest The absence of detailed terms did not render this basic agreement between the parties indefinite Further, the detailed terms are capable of being ascertained in the future, based on the parties' prior conduct and reasonable business practices Lerner also argues that the term Midwest is indefinite Here, substantial evidence exists from which a jury could find that mutuality of obligations arose out of the Telephone Deal According to the terms of the Telephone Deal, Ark-Mo was obligated not to pursue any ownership interest in BCR in consideration of Lerner's promise to allocate Ark–Mo a 30% ownership interest in future CHEP projects in the Midwest In return, Lerner was obligated to give Ark–Mo This is a preview Do you 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Log in a 30% ownership interest in future CHEP projects the parties would together in the Midwest Because both parties were held to an implied requirement to act in good faith and make reasonable efforts, the possibility that there might not be any more opportunities for CHEP projects does not render these mutual obligations illusory Therefore, we find Ark–Mo presented substantial evidence from which a jury could reasonably find mutuality of obligation existed in the Telephone Deal Case law  Steelhead Townhomes, L.L.C v Clearwater 2008 Note Program, LLC  Bertelsen v Channel Bio, LLC Comparing with similar cases 8.1 Steelhead Townhomes, L.L.C v Clearwater 2008 Note Program, LLC  Respondents: Steelhead Townhomes, L.L.C  Appellants: Clearwater 2008 Note Program, LLC  Jonathan Sternberg, Kansas City, for appellant John M Duggan, Deron A Anliker, Overland Park, KS, for respondent ➞ The judgment of the circuit court is affirmed 8.2 Bertelsen v Channel Bio, LLC  Participants: Ralph Richard Bertelsen, Plaintiff, v CHANNEL BIO, LLC, et al., Defendants ➞ It is hereby ordered that Defendant Channel Bio, LLC's motion to dismiss is denied at to Count I and granted as to Count II (Doc No 17.) III Case conclusion & answers for question 11 Yes There was consideration to support the Telephone Deal Consideration can consist of a promise, a performance, or a forbearance (refraining from an action that one has a legal right to undertake) In this problem, Mark Garnett, an owner of Arkansas-Missouri Forest Products, LLC (Ark-Mo), and Stuart Lerner, an owner of Blue-Chip Manufacturing (BCM), agreed to engage in wood-pallet enterprises together, with Ark-Mo to have a 30 percent ownership interest in their future projects When Lerner formed Blue Chip Recycling, LLC (BCR), to manage a pallet repair facility in California, however, he allocated only a percent interest to Ark-Mo Garnett objected In a "Telephone Deal," Lerner promised that Ark-Mo would receive a 30 percent interest in their future projects in the Midwest Garnett then agreed to forego an ownership interest in BCR Acting on Ark-Mo's behalf, Garnett could have accepted the percent allocation in BCR, but he refrained from doing so Instead, he accepted Lerner's promise of a 30 percent share in their future projects in the Midwest and made no more demands regarding BCR In other words, Garnett gave up the opportunity to have an ownership interest in BCR in exchange for Lerner's agreement that Ark-Mo would have a 30 percent ownership interest in certain future projects In the actual case on which this problem is based, Ark-Mo filed a suit in a Missouri state court against Lerner, alleging breach of contract The court issued a judgment in Lerner's favor A state intermediate appellate court reversed, in part on the reasoning stated here "Valid legal consideration supported the Telephone Deal." IV Law Application: Vietnam Civil Code  Điều 119 Bộ luật Dân 2015 quy định hình thức giao dịch dân Giao dịch dân thể lời nói, văn hành vi cụ thể Giao dịch dân thông qua phương tiện điện tử hình thức thơng điệp liệu theo quy định pháp luật giao dịch điện tử coi giao dịch văn Trường hợp luật quy định giao dịch dân phải thể văn có cơng chứng, chứng thực, đăng ký phải tn theo quy định  Điều 400 Bộ luật Dân 2015 quy định thời điểm giao kết hợp đồng Hợp đồng giao kết vào thời điểm bên đề nghị nhận chấp nhận giao kết Trường hợp bên có thỏa thuận im lặng trả lời chấp nhận giao kết hợp đồng thời hạn thời điểm giao kết hợp đồng thời điểm cuối thời hạn Thời điểm giao kết hợp đồng lời nói thời điểm bên thỏa thuận nội dung hợp đồng Thời điểm giao kết hợp đồng văn thời điểm bên sau ký vào văn hay hình thức chấp nhận khác thể văn Trường hợp hợp đồng giao kết lời nói sau xác lập văn thời điểm giao kết hợp đồng xác định theo khoản Điều  Khoản Điều 404 Bộ luật Dân 2015 quy định giải thích hợp đồng Khi hợp đồng có điều khoản khơng rõ ràng việc giải thích điều khoản khơng dựa vào ngơn từ hợp đồng mà cịn phải vào ý chí bên thể tồn q trình trước, thời điểm xác lập, thực hợp đồng Khi hợp đồng có điều khoản ngơn từ hiểu theo nhiều nghĩa khác phải giải thích theo nghĩa phù hợp với mục đích, tính chất hợp đồng 13 This is a preview Do you want full access? Go Premium and unlock all 15 pages Access to all documents Get Unlimited Downloads Improve your grades Upload Share your documents to unlock Free Trial Get 30 days of free Premium Already Premium? Log in Khi hợp đồng có điều khoản ngơn từ khó hiểu phải giải thích theo tập quán địa điểm giao kết hợp đồng Các điều khoản hợp đồng phải giải thích mối liên hệ với nhau, cho ý nghĩa điều khoản phù hợp với toàn nội dung hợp đồng Trường hợp có mâu thuẫn ý chí chung bên với ngôn từ sử dụng hợp đồng ý chí chung bên dùng để giải thích hợp đồng Trường hợp bên soạn thảo đưa vào hợp đồng nội dung bất lợi cho bên giải thích hợp đồng phải theo hướng có lợi cho bên V References [1] Arkansas-Missouri Forest Products, LLC v Lerner, 486 S.W.3d 438 | Casetext Search + Citator [2] Arkansas-Missouri Forest Products, LLC v Lerner et al, No 4:2015cv00771 Document 23 (W.D Mo 2016) [3] Giao dịch dân gì? Điều kiện để giao dịch dân có hiệu lực