Contracts Case Study
The purpose of this assignment is for you to identify and apply contract law to a hypothetical situation and review dispute resolution methods
Task: You are helping with legal research. In preparing a memo reviewing the issues in Sunita Sharma’s case, you recognize numerous issues. Select only three (3) distinct issues. Identify and analyze three legal issues in the scenario. Make assumptions and inferences where you feel they are appropriate and tied to the facts. Your legal analysis will be included in the opinion letter to the client. While Sunita is an educated, professional client, she knows very little about the law. She needs you to explain the contract law principles and apply them to the facts.
Provide case law examples to help her understand and ultimately explain what it means to her. Choose your language carefully to make it easy for her to understand the legal concepts and recommendations. (approx. 150 words)
The summary should be 5-6 sentences long
Read the case material (instructions, fact scenario, and contracts) carefully.
Briefly summarize the key facts.
There are a lot of unnecessary details in the scenario. Make sure to succinctly recount, in your own words, the facts that matter from a legal perspective.
Identify three relevant legal issues that affect the client.
There are more than three in the scenario, so you should have no problem
State the relevant facts from the scenario for each issue
iii. Each legal issue has a set of facts. There is some overlap in the facts
Explain the law you have learned that applies to each issue.
For each issue, explain the general principles, and provide at least one case that illustrates how the principle applies.
In the conclusion section, summarize your opinion on three issues in clear language that she can understand and outline one option the client can use to resolve the dispute(s).
Possible issues:
Rules of contract interpretation
Implied terms
Breach of contract
Liquidated damages clauses
Warranties and Conditions
Frustration
Mitigation
Assessment of damages
Pull together your preparatory work, and then write a draft paper.
CASE STUDY #2 SCENARIO
Sunita Sharma is a high-end architect and interior designer. She owns a company called YYC Design Co., which primarily offers architectural and interior design services to commercial customers. Occasionally, she will take on residential work but only by referral.
She has recently taken on Samantha Lindt and Nabil Youssef as residential clients. She did so only because Samantha Lindt is the CEO of one of her biggest corporate clients, Fire and Ice Properties Inc (“F&I”), and it is critical to Sunita’s business to keep this commercial client happy. F&I has an annual interior design budget of $275,000, and historically, the accounting department always promptly paid Sunita’s bills when she worked them. Sunita anticipates that YYC Design Co. will be the interior designer and architect of F&I’s newly acquired building. Still, the bidding process for the project has not commenced.
Nabil is Samantha’s husband, who has been living with Samantha for about a year. Nabil is a freelance writer and editor specializing in travel and food writing. Nabil is currently writing articles for World Travel Guide on Mexico, where Nabil and Samantha first met. Nabil and Samantha hired YYC Design Co. to change their Canmore condo drastically. Samantha is very busy and told Sunita that Nabil would make all of the necessary decisions regarding the renovation and redesign of the apartment. He was the creative one in the relationship anyways.
Sunita worked with Nabil to design an upscale, cozy mountain retreat. While Nabil was generally cost-conscious, he splurged on a custom-made soapstone gas fireplace to be the focal point of the living room design. The fireplace had to be pre-ordered from Edmonton, and the manufacturer required pre-payment before delivery. The manufacturer also had a no-return policy since the product was custom-made. Sunita explained this to Nabil before placing the order.
The fireplace, including delivery, costed $9,547. After Sunita’s 30% markup ($2,864.10), the total quote for the fireplace was $12,411.10. In addition to the fireplace, Sunita quoted $2,585 for her design work. She also quoted $8,600 for labour, $3,975 for the additional furniture, accents, and wallpaper, that would be used in the design, and $765 for miscellaneous materials (i.e. natural gas installation for the fireplace). The full value of the contract was $28,336.10 before tax.
Both Samantha and Nabil signed the contract (see below). Since the fireplace was not returnable, the contract provided that payment for the fireplace ($12,411.10. before tax) was due upon execution of the contract. Trusting she would receive payment, Sunita ordered the fireplace shortly after the contract was signed. The parties agreed that the interior work would be commenced once the fireplace arrived. Samantha and Nabil never paid for the fireplace.
The fireplace arrived on October 6, 2022. Sunita could not reach Nabil by telephone the day it came but left a message telling him that the fireplace had arrived and that he should call her to let her know when she could start the job. The same day, Sunita also emailed an invoice that indicated that $14,996.11 plus tax was due and owing (for the fireplace and the design work that had already been completed). She addressed the invoice to Samantha Lindt and Nabil Youssef at their email addresses. She included a note requesting that the couple contact her as soon as possible so she could get started on the job.
After a week with no word from Nabil, Sunita called and left another voicemail message. The following day Sunita arrived at work to find a return voicemail message from Nabil.
In the voicemail, Nabil apologized for not calling sooner and said that he simply forgot with all the commotion of his latest trip. He then said that he changed his mind and, instead of the fireplace and cabin feel, had hired Modern Talking Ltd. to redesign the interior to reflect an edgy and contemporary look with ceiling-to-floor bookcases, dark colors, and a zen garden inside. He concluded by saying that he was on his way to the airport and would be out of the country again for the next month but that he would be willing to pay to ship the fireplace back to the manufacturer.
Sunita is extremely upset. However, she does not want the conflict to adversely affect her relationship with Samantha and F&I. This is the first time she has faced a similar situation, and she is unsure how to proceed. She believes she has rights under the contract but must mitigate her losses, but she does not know what that means.
She has contacted the fireplace manufacturer to see if it would accept a return of the fireplace.
The manufacturer advised that it would not accept a return under the terms of the sale. However, after inspecting the fireplace on October 10, she noted that it was missing a crucial part, without which it would not work.
Sunita would prefer to get the contract’s total value but is also willing to forego some of it to ensure the relationship with Samantha and F&I is unaffected. She is also interested to know her options regarding the fireplace. The terms and conditions of Custom Fireplaces Ltd. are attached.
