To: Mrs. Dorothy Lafe, Vice President
cc: Head of Departments
From: Legal Officer, White Casino
Subject: Contractual Issues and Termination
Enoch Thompson was in White Casino for a certain period of time and was approached by Shirley Eugest, a manager from a rival company to White Casino. Shirley offered Thompson, a salary hike than White Casino, and offered him a job opportunity. The manager, upon receiving knowledge from other employee, about Thompson, and promised him, a five-year contract with a hike of 50% on salary, and believing this Thompson, turned down offer, but he was finally dismissed due to corporate downsizing from White Casino.
This involves two contractual issues, one is the Oral Contract and the other is the Promissory Estoppel. The basic elements of contract are the promise or the offer, the acceptance of it, a valid consideration, with an intention to create a contract, the basis or the object of contract must be lawful, and the parties to the contract must not be a minor. So, in the present case, Thompson was promised a five- year contract with a salary hike. The action of Thompson in not opting for the job so offered by the rival company, i.e. the job offered by Shirley Eugest, is the implied acceptance of the promise so made by Sal Pending, the manager of White Casino. The consideration was also valid and both the parties are not minor, and the intention to create legal relation also exists, so, it can be easily concluded that, there was a contract. So, it is required on Thompson to prove that there was a promise, so made by Sal Pending and based on that there was the foreseeable reliance on the promise by the promisor and also the subsequent reliance by Thompson on the promise so made.
Again, once the promisee or Thompson starts to perform, or tenders the performance, the promise so made by the promisor that is Sal Pending becomes irrevocable and the promisee who has already commenced or at least tendered performance is never obligated to complete the full performance, and hence cannot claim the promisor’s promised performance without completing the full performance within allotted time. But, if the promisor repudiates after the beginning of performance, the promisee has a contractual cause of action since the failure of not completing the performance is excused by the repudiation. But, here the promisor or Sal Pending have not repudiated the promise at the beginning and have actually made Thompson believe and work on that. So, yes, the promise so made by Sal Pending is legally enforceable by Thompson.
So, the promise so made by Sal Pending to Thompson, acts as a promissory estoppel, and if Sal acts contrary to it, which in other words mean that, when a promise is made and based on that promise, something is done in furtherance to it, then the person who is making the promise cannot behind it and deny the promise so made. Promissory estoppel is that notion by which a person makes a promise, and the other person justifiably acts to his or her detriment relying on the promise so made, and so to meet the ends of justice, that promise should be enforced.
Thus, applying this in this scenario, Thompson, have the right to enforce the promise as against Sal Pending, in the Court of Law, since, Sal by his actions have induced Thompson, and Thompson, behaved in manner which is not inconsistent with the promise so made by Sal, so Sal is estopped from making any other promise or any other action, which will be inconsistent with the actions so performed by Thompson, was held in (Farmers Mutual Protective Association of Texas v. Zwernemann, Larry and Zwernemann, Polly, 1996). So, Sal cannot claim that the oral contract so made by him to Thompson, is invalid, was held in (Speckman v. City of Indianapolis, 1989).
The Court in (Laidlaw v. Organ, 1817), held that the offeror cannot change the terms of the contract so agreed upon by the offeree, at any point of time, so Sal Pending cannot change since it has already been accepted by Thompson, but can change in good faith, if agreed by both the parties was held in (Angel v. Murray, 1974), which is again applicable in this instant scenario, since the case study do not depict that there was any discussion with Thompson, before he was removed from the company. But, Thompson actually agreed to represent White Casino, so the consideration was valid from the part of Thompson, is in lieu of the decision as was held in (Wood v. Lucy, Lady Duff-Gordon, 1917). So, there is breach of contract by Sal pending and that can be enforced as against him by Thompson, since he acted in furtherance to the promise so made was held in (Jacob & Youngs, Inc. v. Kent, 1921), and based on the breach so made by Sal pending, Thompson can seek punitive damages, (United States Naval Institute v. Charter Communications, Inc., , 1991). Again, Thompson can sue the company for downsizing him and can seek compensation, but it is solely on the Court to allow, since no discriminatory tactics surfaced in this instant case, as was happened in (Marissa Carbonara v The Bank of New York Mellon Corporation, 2014). But, whether it is right to downsize Thompson, is an ethical question, so if Utilitarian Approach, is applied then removing the efficient employee cannot have the best consequences, and on applying Egoistic Approach, the company will not be in the position to gain the greatest amount of good for itself. Applying the common good or the duty-based approach is the best so applying that will decide whether downsizing Thompson is the best thing to do.
The basic remedies for breach of contract are compensation in the form of money, or by way of restitution or by rescission or specific performance. Money is awarded as compensation for financial losses caused by a breach of contract. So, Thompson, injured by a breach is entitled to the benefit of the bargain they entered, or the net gain if any which might have accrued but was not possible due to breach. The equitable relief can be in the form of Specific Performance, or can also be in the form of injunction, but, these remedies are for those breach when money or other forms of legal damages is inadequate. Restitution in employment contracts is reinstatement, is a remedy by which Thompson can be restored to the position which he occupied prior removal of him from the company due to downsizing. So, Thompson can also seek restitution if he does not want to be compensated for the lost profits or the earnings he might have accrued from the rival company, caused by the breach so made by Sal Pending and instead of that he seeks restitution. Again, for the total breach, Thompson can recover damages in pecuniary terms by equating it to the value he would have received if there was no breach of the contract
Thus, Thompson can bring a suit as against the company for wrongful termination, but he must prove beyond reasonable doubt that his termination was done in bad faith or with malice and also that his work so done must be against public policy and this must be in accordance to the guideline as was held in (Lacasse v. Spaulding Youth Ctr, 2006), so that his case do not come in the purview of (Katherine Frederick v. State of New Hampshire, New Hampshire Department of Health and Human Services, 2015).
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Farmers Mutual Protective Association of Texas v. Zwernemann, Larry and Zwernemann, Polly, Tex. App 95 S.W.2d 994, 997 (Texas Court of Appeals 1996).
Jacob & Youngs, Inc. v. Kent, 230 N.Y. 239 (1921) (1921).
Katherine Frederick v. State of New Hampshire, New Hampshire Department of Health and Human Services, No. 1:2014cv00403 - Document 13 (D.N.H. 2015) (District Courts, New Hampshire 2015).
Lacasse v. Spaulding Youth Ctr, 154 N.H. 246, 248 (2006) (2006).
Laidlaw v. Organ, 15 U.S. 178 (1817) (1817).
Marissa Carbonara v The Bank of New York Mellon Corporation, NY Slip Op 51361(U) (New York Court of Appeals 2014).
Speckman v. City of Indianapolis, 540 N.E.2d 1189, 1191 (Ind. 1989) (1989).
United States Naval Institute v. Charter Communications, Inc., , 936 F.2d 692 (Second Cir. 1991) (1991).
Wood v. Lucy, Lady Duff-Gordon, 222 N.Y. 88, 118 N.E. 214 (1917) (1917).