can you help business law 280?

HOMEWORK PROBLEM #3

(a) Martin Mogul, CEO of Colossus Studios, wanted to hire Zach Taylor to be head of the video sales division. He told Taylor during a meeting at an upscale Beverly Hills restaurant: “At the beginning of 2000, when you are free from your contract to work for Rupert Murdock’s company I want you to come to Colossus. I will pay you $2 million per year. Your employment with us will be for a period of 5 years. Of course we can draw up a formal written contract later.” Taylor replied: “I really want to work for you – of course I will accept your offer.” No written contract was ever signed. On 15 December 1999 Mogul called Taylor and said: “I’ve changed my mind and hired someone else for the video job – we won’t be hiring you after all”. Taylor, claiming that he had a contract providing for employment for a period of 5 years, filed suit for breach of contract. Is Taylor’s contract with Colossus enforceable? Explain.

(b) Since 1990 Laura Martinez had been employed full-time as housekeeper for Zach Taylor’s huge house in Bel-Air. On 1 April 1996 Taylor said to Martinez during a conversation: “You don’t need to worry about unemployment – I promise that I will employ you to work for me for the rest of your life. Your salary will always be at least $5 per hour above the minimum wage”. On 2 January 2000 Taylor said to Martinez: “I’m in real financial trouble – I intend to sell the house and move into a bungalow at the Beverly Hills Hotel. I won’t need a housekeeper any more. Your last day on the job will be 1 April 2000”. Martinez, claiming that she had a contract providing for lifetime employment, filed suit for breach of contract. Is Martinez’s contract with Taylor enforceable? Explain.

(c) Robert Johnson, president of the TV division of Colossus Studios, was having an affair with his secretary Roxie Hart. On 10 March 2002 he said to her: “You know I can’t leave my wife. We must end our relationship”. On 2 May 2002 during a conversation he told Charles Walton, his personal assistant, “I know how much you like Roxie, and I know she really likes you. She and I have broken up – if you marry her before the end of the year I will give you my little house in Brentwood on the day of the wedding”. On 24 December 2002 Walton and Hart got married in Las Vegas. Johnson and his wife attended the wedding; however Johnson did not transfer ownership of the house in Brentwood to Walton. Walton filed suit against Johnson for breach of contract. Is Johnson’s contract with Walton enforceable? Explain.

(d) On 10 May 2002 John Smith, manager of the food services division of Colossus Studios, telephoned Mark Sanchez, sales manager at Berkeley Farms Dairy and said: “We need to purchase 500 gallons of milk per week from June through December. Could you supply it? How much would it cost us?” Sanchez replied: “We can sell you 500 gallons per week at $1 per gallon”. Smith then said “Great – it’s a deal”. The next day Sanchez sent a FAX to Smith that said: “As agreed in a telephone conversation yesterday Berkeley Farms Dairy will supply to Colossus Studios 500 gallons of milk per week during the months from June 2002 through December 2002. The milk will be delivered on Monday of each week to your cafeteria in Burbank. Payment will be made within 3 days of each delivery. [signed] Mark Sanchez.”

Smith discovered that he could obtain milk from Carnation Dairy at 95 cents per gallon. On 21 May 2002 Smith telephoned Sanchez and said: “I got a better price from your competition, so we will not buy any milk from you. You can sue us if you want to but it won’t do you any good. Remember that no one here at Colossus ever signed any document concerning our arrangement to purchase milk from you. This means that because of the Statute of Frauds any suit you bring against us will not be successful.” Berkeley Farms sued Colossus Studios for breach of contract. Is the contract between Berkeley and Colossus enforceable? Explain.