Oral Employment Contract with Company
Case Study 1
Lamar Smunt, eccentric millionaire, sends Casimir Roginsky, famous portrait artist, a letter offering to pay Roginsky $500,000 to do a portrait of Smunt’s mother. Roginsky sends back a letter that says: “I’ve had the misfortune of seeing your mother and would need $750,000 before my artistic sensibilities would allow me to undertake such a harrowing project.” Three hours later, after reflecting upon the sad state of his finances, Roginsky telephones Smunt and says: “I’d be delighted to paint your lovely mother. Destroy my letter without reading it. It was sent by mistake.” Smunt disregards Roginsky’s instructions and reads Roginsky’s letter when it arrives. He becomes enraged at the insult to his mother and refuses to allow Roginsky to do her portrait. Roginsky files a breach of contract suit against Smunt.
Discuss Roginsky’s chances of success. Consider the following topics:
- Offer and acceptance
- When can an offer be accepted?
- When can an offer be revoked?
- The mailbox rule
- Traditional acceptance under the rule and a more modern view under the Uniform Commercial Code (UCC) and the Restatement
Case Study 2
Wombat entered into an oral employment contract with Tony’s Toy Company. Tony’s has orally agreed to hire Wombat for 3 years as a district manager. Wombat quit his job, sold his house, and moved his wife and five children to another state in order to start the new job. One month later, Tony’s informed Wombat that things weren’t working out and that his job was terminated.
- Is this contract enforceable under the Statute of Frauds? Remember to carefully read the Statute of Frauds as it specifically relates to oral contracts.
- Is it enforceable under any other theory under which Wombat may recover damages from Tony’s Toy Company?
- Are there ethical considerations that apply to this case?