How Contracts Are Assigned to Third Parties Discussion
Weekly Learning Objectives: • Learner will evaluate how contracts are assigned to third parties. • Learner will explain the remedies following a breach of contract.
Using the Blog Rubric listed below for the specific grading criteria, complete the following: Read through the excerpts from the decision of the Michigan Court of Appeals in Able Demolition v. City of Pontiac. (ATTCHED) After reading and thinking about the Court’s decision, answer the following questions: • In your opinion, was the result reached by the courts “fair” in this case? Would you have ruled the same way as the trial judge and the appellate courts in this case? Why or why not? Explain your answers thoroughly. • How do you think Able got itself in this mess? Do you think it just ignored the requirements of the contract, or was something else at play? If you think something other than ignorance must have been involved, what was it?
- Create a blog by using the LEGL710 – Weeks 3, 5 & 7 Blog Assignment document.
- Post your entry to the blog you created that addresses the information above.
- Reply to student reponse below
Support your thoughts using a minimum of two academic, peer-reviewed sources (outside the textbook). Websites such as Wikipedia, LegalZoom, LegalMatch, Nolo, etc. do NOT count as academic sources. A good place to start is the Davenport University Library. Substantial blog entries should contain at least 1200 words.
Please follow rubric
STUDENT YOU HAVE TO RESPOND TO MUST BE 350 WORDS
Able Demolition v. City of Pontiac
In your opinion, was the result reached by the courts “fair” in this case? Would you have ruled the same way as the trial judge and the appellate courts in this case? Why or why not? Explain your answers thoroughly.
In my opinion the result reached by the court in this case was fair. I would have certainly ruled the same way as the trial judge and the appellate court in this case. Abel and the city of Pontiac had an agreement that outlined the procedure for the demolition of houses. The process was clearly laid out with all the specifications that had to be followed, from prior to starting the demolition to the collection of payments, which were to be released by the city to the contractor.
Abel violated the terms of the contract by not following the terms specified in the contract. According to the contract, the contractor in this case, Abel, was supposed to clear the demolition with the city before proceeding. The letters did just that. The letters of authorization from the city before beginning the demolition of each house would also provide Able with proof, that was required to be submitted at the time payment to the appropriate city official for collection. The breach of contract was done by Abel in this case and not the city of Pontiac. According to The University of New Mexico (n.d.) “A breach of contract is a failure, without legal excuse, to perform any promise that forms all or part of the contract”. Abel admits to the fact that it did not get the authorization letters from the city for eleven houses before beginning demolition. The outstanding balance that is being claimed by Abel is $42,299 from the city for these eleven houses which are in question.
The unjust enrichment or quantum meruit does not support Abel’s case since the contract was not followed and the consequences of not getting the letter were part of the language that was clearly defined. According to Cornell Law School (n.d.) “Within contract law, promissory estoppel refers to the doctrine that a party may recover on the basis of a promise made when the party’s reliance on that promise was reasonable, and the party attempting to recover detrimentally relied on the promise”. The promissory estoppel does not apply in this case because Abel was in fact the party that failed to follow the contract and the city of Pontiac followed the contract.
The contract also stated, if the letter of authorization is not provided by the contractor to the city at time of collection, there will be no payment issued to the contractor. The city of Pontiac put the clause of the letter of authorization in the contract to make sure the property owners rights were not violated. In the case of a property owner obtaining a last-minute temporary restraining order to prevent demolition of the building, the letter was a safeguard, to ensure in a way of checking to make sure no such action has been taken by the property owner. The authorization letter from the city is an essential term in the contract and not obtaining the letter can have serious implications.
How do you think Able got itself in this mess? Do you think it just ignored the requirements of the contract, or was something else at play? If you think something other than ignorance must have been involved, what was it?
I think Able failed to understand the importance of obtaining the letter of authorization. Clearly, Able was trying to monetize quickly without following policies and procedures. Only Able can answer for certain what the motive was. Perhaps the contractor thought it would take time to get the letter for each house and that may cause delays, or maybe more workers needed to be paid for more hours and costs needed to be reduced. In any case, Able was irresponsible. Able also failed to understand the consequences of the liability that it was opening up for the city of Pontiac and itself by not getting the letter of authorization. For example, all eleven of those houses could have obtained a last-minute restraining order to prevent demolition of the building. That would be a violation of the citizens of Pontiac’s property rights.
In conclusion, I agree with the result that was reached by the courts and I would have ruled in the same way as the trial judge and the appellate courts in this case. The written contract had to be followed by Abel to be able to collect payments for demolition. The letter of authorization should have been received prior to starting the demolition of each of these eleven houses in question. By not collecting the letter of authorization, Abel was not only not following the contract but also the citizens’ rights of the property owners could have been violated if the property owners obtained a last-minute temporary restraining order to prevent demolition of the building. The contactor also put the city of Pontiac at risk for potential liability.