Question for the lawyers in the room

[blackplatano]

I have a question from my "Fundamentals of Business Law" class that I'm having a hard time answering. This is the question

A) Adam is the religious leader of the religion that Bob and Carol practice. They
want to get married so they ask him to perform the ceremony. He agrees after telling
them that he takes such duties very seriously and spends a lot of time and effort
writing a sermon, thinking about the couple's particular personalities and preparing
some materials he likes to give to the couple. He also tells them that the charge
for his service is $ 2,000 and they agree. The morning of the ceremony, Bob and
Carol have a huge argument and cancel their wedding. Adam demands his $ 2,000 for everything he has prepared but they refuse to pay, saying that they agreed to pay him the money for marrying them, which he was not going to do. How could Adam have avoided this mess?

I'm sure it's a basic question, but I'm not a lawyer. What would you answer?

 

[madison avenue]

from what I remember at contract over 500$ has to be signed in writing. Verbal agreements are only good for less then 500$

 

[DNW]

Here's what I would've done to avoid the mess: get everything in a signed writing stating what his services would be and include a clause stating the fee schedule based on what's been done in case of termination.

This is not a question of law, it's a question of mere common sense.

 

[lawyerdad]

Yes, exactly. ^^
He should have included a clause in his agreement (or even made clear orally) that they are paying for his time and effort, and that as a result they are required to pay him if they cancel after he has already invested substantial time and effort.

Belt and suspenders, include that in the agreement and require payment in advance. That could even save the marriage, as they may decide to go ahead if they have to view the $2,000 as a sunk cost.

 

[madison avenue]

Originally Posted by DarkNWorn

Here's what I would've done to avoid the mess: get everything in a signed writing stating what his services would be and include a clause stating the fee schedule based on what's been done in case of termination.

This is not a question of law, it's a question of mere common sense.

What I said except more in debt. Most law is common sense Sadly most Americans have none.

 

[lawyerdad]

Originally Posted by madison avenue

What I said except more in debt. Most law is common sense Sadly most Americans have none.

Funny, I almost said in my post that the law and common sense overlap a lot more than most people realize.

 

[gvibes]

Originally Posted by lawyerdad

He should have included a clause in his agreement (or even made clear orally) that they are paying for his time and effort, and that as a result they are required to pay him if they cancel after he has already invested substantial time and effort.
This is called a liquidated damages clause.

Also, I think the statute of frauds dollar limit only applies to goods, not services, but I don't know.

 

[DNW]

Originally Posted by gvibes

Also, I think the statute of frauds dollar limit only applies to goods, not services, but I don't know.
Statute of frauds was a creature of common law before codified in the form of the UCC (applicable to goods, worth more than $500). It's applicable to contracts other than for the sale of goods, but only in few limited circumstances allowed by state statutes.

 

[solipsist]

Originally Posted by blackplatano

I have a question from my "Fundamentals of Business Law" class that I'm having a hard time answering. This is the question





I'm sure it's a basic question, but I'm not a lawyer. What would you answer?

I think the answer is, off the top of my head,.. that it depends on state law -- the UCC won't apply (not a good). As stated above, if the statue of frauds applies, it had to be in writing and there will be no recovery on the contract. If statute of frauds doesn't apply then the breach of one party does not eliminate all responsibilities under the contract. Even if the statute of frauds does apply then he may still recover under promissory estoppel, as it was foreseeable that he would do preparation and put $ into preparing. However, he likely won't recover the whole amount of the contract, but rather $ for materials and reasonable amount for his time.

 

[Brad]

Originally Posted by lawyerdad

Funny, I almost said in my post that the law and common sense overlap a lot more than most people realize.

I agree.

The SOF most likely will not apply to these facts.

If the preacher man wants to recover anything it will most likely be under quasi-contract.

But, that's just a thought.

 

[lpresq]

Originally Posted by gvibes

This is called a liquidated damages clause.

Also, I think the statute of frauds dollar limit only applies to goods, not services, but I don't know.

Fyi, the stat of frauds applies to the sale of goods > $500 and service kx's of 1yr or more as well as a few other situations such as the sale of RE etc.

 

[lpresq]

Originally Posted by gvibes

This is called a liquidated damages clause.


Wrong. Liq. damages apply when the value/price is not determinable. I would venture to say a valid kx was executed, and the issue in this case is one of reliance....the doctrine prom. estoppel would apply. THe preacher relied on the couples' promise and began preparing for the job. At the very least, said preacher will be entitled to the value of the work performed.

 

[WestIndianArchie]

A) Adam is the religious leader of the religion that Bob and Carol practice. They
want to get married so they ask him to perform the ceremony. He agrees after telling
them that he takes such duties very seriously and spends a lot of time and effort
writing a sermon, thinking about the couple's particular personalities and preparing
some materials he likes to give to the couple. He also tells them that the charge
for his service is $ 2,000 and they agree. The morning of the ceremony, Bob and
Carol have a huge argument and cancel their wedding. Adam demands his $ 2,000 for everything he has prepared but they refuse to pay, saying that they agreed to pay him the money for marrying them, which he was not going to do. How could Adam have avoided this mess?

________________________________________

How could have Adam avoided this mess?

This is a lot more difficult than it looks, but here are the 2 easy preventative options

1) Get all the money up front, and have a written contract with a "liquidated damages clause" - harder to do for business reasons (cause you'll eliminate a lot of people who dont have the full amount at the time)

2) Get some of the money up front, and have a written contract with a "liquidated damages clause" - easiest to do.


The real problem here is that

"He agrees after telling them that he takes such duties very seriously"

The key word here is after. He told them what the contract was, and they didn't say no, didn't say anything, and just let him work on their wedding. (if the Judge rules against Adam on the contract, he should have some reliance damages coming to him)

If you really wanted to do the offer and acceptance analysis, it might go like

a. They made an offer to marry him,

b. But his explaining that that entailed could be considered counter offer, because his explanation may not haveperfectly matched what they had mentally envisoned but did not say out loud.

The couple either did not pay attention, ignored, or are now lying that Adam did not tell them what he was charging for.

So that gives us a 3rd option

3) Take no money up front, run a credit check, do a background check, counsel the party on what the ceremony entails and what it will cost, and put that in the written contract.

On the bill/schedule of fees, break out each part of the planning process line by line, and fix a dollar value to that.

On the contract
- define breach of contract - if you don't get married, you have materially breached this contract, and I am entitled to my full damages/fee

- Set up a liquidated damages clause, in case he can't get full damages. (liquidated damages is an amount that the parties agree before hand, represents the value of the services. You can use this clause when the service/object of the contract will be hard to evaluate on the open market.)

- make sure that BOTH parties are responsible for the debt, not just the one who calls it off.

So when they do call it off, you've defined calling it off as a breach, they've agreed you're entitled to full damages, failing that you've specified a lesser amount, and you've got them both on the hook to pay.

 

[blackplatano]

Thanks everyone for the help.

I included the liquidated damages, the statute of frauds and also added something that people forgot. Adam's contract was a non-divisible mixed contract since he mentions the "materials" he gives to the couple. SO the statute of frauds is important as well as the UCC, GOL dynamic.