A contract is a binding legal agreement between two parties that is made with the intention to create a legal relationship. Contracts in the English legal tradition are made by the exchange of consideration between the parties.
Fox v. Mountain West Electric, Inc., 137 Idaho 703 (2002)
In this case, Lockheed Martin had a building project which Fox and MWE decided to do jointly as a way of winning the bid to complete it. They created a document that acted as the scope of the work they were to complete and in the process, Fox worked under the supervision of a manager of MWE. There were changes in the terms of the building contract terms by Lockheed Martin. This caused some kinds of disagreements between Fox and MWE on how to deal with the changes. Fox was not able to meet what he sought, so he left the project, but MWE hired another company to do the work Ford was previously doing. Fox sued Fox for damages and MWE countersued Fox.
The court had to decide on whether there was a de facto contract between Fox and MWE or not. Fox presented estimates of what went into the changes in the calculation of the orders. This showed that MWE agreed to pay. The court therefore held that there was an implied contract because there was evidence that MWE had by conduct decided to pay for work done by Fox. So the court implied there was an agreement that was meant to be legally binding.
Steinberg V Chicago Medical School (1977)
Steinberg applied to the Chicago Medical School and paid an application fee of $15. The application was rejected and he sued on the grounds that he applied for admission based on academic criteria published by the CMS. However, in a breach of contract, the CMS evaluated his application on the basis of some unpublished social criteria that was used as the basis to reject his application.
The issue was whether there was a legal contract or not. This is because for a contract to be formed, there should be an intention to create a legal relationship. And once this is done, there must be consideration that will be exchanged by the parties. Thus, the court had to decide on whether Steinberg’s $15 was adequate as a consideration that compelled the university to evaluate his application as consideration in return for Steinberg’s consideration.
The court agreed that the application created a valid contract. And as such, the university had an obligation to evaluate Steinberg’s application according to the published standards and requirements.
Skebba v. Kasch (2005)
Skebba worked for Kasch. In 1993, when the company went through financial crisis, Kasch agreed to a promise proposed by Skebba that on the attainment of three conditions, including the event of the sale of the assets of Kasch, Skebba would be paid $250,000. However, the promise was not made in writing.
In 1999, the assets of Kasch was sold and Skebba sought to enforce the promise. Since the contract was not in writing, Kasch refused to pay Skebba. Skebba sued on the grounds that there was a breach of contract and he sought to attain a promissory estoppel that will prevent Kasch from going back on their word. The case was presented to a trial court which ruled that Skebba would not have earned that amount if he remained employed by Kasch.
Skebba appealed and the case was viewed on the basis of the doctrine of promissory estoppel. It was held that there was a breach of the doctrine of promissory estoppel. This was upheld on the appeal and Kasch was required by the court to recognize the terms of the de facto contract that was formed upon making that promise.
