This would be by far the largest construction contract ever undertaken by ABC Construction Company, but ABC has been growing rapidly and its business plan calls for it to be able to undertake construction jobs of this magnitude. ABC is not concerned about its ability to do the job, but it is concerned about the process of developing a bid which is as low as possible, but will yield it an adequate profit. ABC identified 30 different parts of the total job which it believed would each require a different subcontractor (in addition to other parts of the job which it would do itself). ABC requested that all subcontractor bids should arrive by Wednesday, April 14. Since this was not a public project, ABC could select its subcontractors on any basis it wished and it was under no obligation to include in its bid to Developer any identification of the subcontractors whose bids it used nor did it have to make any commitment to Developer about who the subcontractors on the job would be.
Nevertheless, in its request for bids, ABC stated that it would use, in its bid to Developer, and would contract with the subcontractor submitting the lowest bid in each of the 30 parts for which bids were requested. In its request to subcontractors invited to bid, ABC included the following written statement:
"ABC will promptly inform any subcontractor whose bid is used in arriving at our bid to Developer."
On April 15 ABA received a bid from Timber, Inc. which included all necessary tree removal and regrading of the land in accordance with Developer's specifications. The bid was for $100,000.
In calculating its bid to Developer on the night of April 15th, ABC used Timber's bid of $100,000 for this part of the job rather than Clear Company's bid of $120,000. Because ABC was running behind schedule in developing its bid, it did not notify Timber, Inc. that its bid was used by ABC in composing its bid to Developer.
Developer awarded the contract to ABC and that award was given a great deal of publicity on Springdale TV and in its newspapers. By the afternoon of the award of the contract by Developer to ABC, ABC received a call from Dig Inc., a competitor of Timber and Clear offering to carry out the tree removal and regrading portion of the contract (the portion on which Clear and Timber had bid) for $10,000 less than Timber's bid of $100,000.
ABC would like to have the benefit of your opinion about its choices in this circumstance. If Timber insisted on its right to a contract, would ABC have a defense to that claim? If Clear Company insisted on its right to a contract, would ABC have a defense to that claim? If Timber did not wish to go forward with the contract, but ABC wished Timber to be the subcontractor on this job, would ABC have any rights against Timber? ABC is tempted by Dig's $90,000 bid but has some doubt about whether that bid has taken account of all of the aspects of the job for which the bid was submitted since, unlike Clear and Timber, no representative of Dig had ever visited the site on which the work was to be done. If ABC accepts Dig's offer, could Dig later escape the obligations of that contract? Finally, would ABC violate any exiting obligation to Clear or to Timber if it made a contract with Dig to do the job? Assume in your answer that none of the parties have breached duties defined by tort law.
If buyer fails to make payments within 30 days of delivery, seller may cancel the contract or may require cash on delivery for future deliveries under this contract.
Under the agreement, B Records was to order the quantity of blank CDs it wanted not later than the 15th day of each month and Tuji was to deliver the CDs by the 10th day of the following month.
The first order by B Records was placed at the time of the signing of the agreement. It was a purchase order for 1000 blank CDs. The CDs arrived on January 10. B Records' engineers examined the CDs and concluded that at least one-half of them had surface defects that would make them unusable for its purposes. B Records promptly informed Tuji about these defects. Tuji responded that they would replace any CDs with defects. From B Records point of view, the answer was only partly satisfactory. B Records stated it might not be able to identify all defective CDs until it made an effort to record on them. Even though Tuji would replace defective ones, the labor and equipment cost to record on what proved to be a defective CD would still have to be borne by B Records. Tuji shipped replacements for all CDs whose defects had been identified on January 15. B Records accepted them upon their arrival on January 20. That same day, B Records placed its order for delivery in February. The order was for 500 CDs.
B Records paid for the 1000 January CDs on February 14, more than 30 days after the January 10 delivery but within 30 days of the arrival of the replacement CDs. On February 15, Tuji responded to that payment and to the order for 500 CDs with the following letter to B Records:
Pursuant to our contract, any further deliveries will be on a cash on delivery basis. Furthermore, your order for 500 CDs is in breach of our contract.
Please provide B Records with an analysis of its legal position. Make certain that you also explore the arguments you would anticipate from Tuji.
When Felicia approached Max, the owner of George, the male persian cat, with this suggestion, Max responded that for this "service" he wanted $250 and one of the kittens to be selected by him. Furthermore, he stated that he wanted assurances that Darling additionally would mate with his male cat once each year in each of the next two years, that is, once during 1999 and once during 2000 and that the arrangements in those years would be the same as those in 1998.
Felicia assented to these terms and the two cats were brought together at an appropriate time and Darling had a litter of three kittens as a result. Felicia paid the $250 and offered Max the pick of the litter, but Max declined to take any of the kittens (apparently because he was dissatisfied with their appearance). Felicia sold each of the kittens for $250.
In February of this year (1999), Felicia, believing that Darling would be ready to mate during May, contacted Max, the owner of the male. Max told her that he had sold George, the male cat, to Carol and had assigned to Carol all rights and liabilities in connection with his cat. When Felicia called Carol, Carol said she knew all about the arrangement that Max and Felicia had about mating Darling and George once each year during 1999 and 2000, and stated that she would not make her cat available unless she was paid $500 for each of the mating sessions in addition to having the right to keep one of the kittens born from the mating of the cats.
Felicia declined to promise to pay $500, which she regarded as an absurd fee. Since Felicia had made a $500 profit on the arrangement with Max in 1998, she was disappointed that the contract was not going to continue, as planned, for 1999 and 2000. Felicia then sought an alternative contract and has learned that she can make an arrangement with Lois, another owner of a champion male persian cat. Because this male is not as well-pedigreed as George, she believes that the kittens from this match are unlikely to sell for more than $175 each. However, she would only be required to pay $150 for the mating of the two cats and would not have to give Lois one of the kittens.
Felicia has now received a demand from Carol that Darling mate with her cat this month. Felicia believes that she had the right to have the services of Max's (now Carol's) cat on the terms of her contract with Max. Felicia wants to know what her legal rights and legal duties are in this situation.
Please advise Felicia about her rights and liabilities. You must not only construct arguments that Felicia could assert, but also consider the arguments which may be advanced by Carol's lawyer.