Angela Woodside visited our firm on December 18th 2007 and played out her scenario for us so that we can help her resolve this dilemma she has been caught up in. After her meeting, you’ve requested that I address the following six (6) issues with my opinion. Please take a moment to review my research. After reading the scenario between Ms.
Woodside and Doyle Contractors the following are the conclusions I have come to.1. Has Doyle Contactors breached its contract with Angela Woodside? Since Doyle Contractors sent a letter to Angela stating that they intend to stop making monthly payments for the land, they have positively and unequivocally stated that they will not perform on the contract, thus causing them to breach their contract with Angela Woodside.2. Does Ms. Woodside have to wait until after April 1, 2008 to sue Doyle Contractors for breach of contract? Doyle Contractors has clearly stated the intent not to honor its contractual obligation before the time for performance.
Because of this decision Ms. Woodside has an immediate right to commence a lawsuit. What this means is that although the time for the contract is not due, Ms. Woodside does not have to wait until after April 1st 2008 to sue for breach of contract under the contract term where there has been an anticipatory repudiation. (Spagnola, Ch.10)3.
Assuming a breach of contract has or will occur, what remedies does Ms. Woodside have after the breach? There are a few remedies Ms. Woodside can use to help her in this situation where a breach of contract has occurred. The first remedy could be the simple option of mutual rescission. In this way, the parties can agree to terminate the contractual relationship and return to the pre-contract status quo. By doing this the parties can relinquish their right to commence a lawsuit based on the original and currently existing cause of action under the contract, also known as a covenant not to sue.
(Spagnola, Ch.12)Ms. Woodside can also approach Doyle Contractors and they can “agree to disagree”. This term is used when the parties agree to modify their original agreement and resolve the issue outside of court.
In doing so, the parties will come to an amicable arrangement in which they will satisfy the original performance. This is known as “accord and satisfy”. Accord and satisfy is to accept the imperfectly proffered performance as a fulfillment to the contractual obligations. In other words, “good enough, let’s not keep arguing about it”.
(Spagnola, Ch.12)Ms. Woodside can also have a substituted agreement. What this does is replace a previous agreement with a new contract without additional but not inconsistent obligations.
(Spagnola, pg. 201) Should Ms. Woodside decide to take this matter to court, she can claim compensatory damages from the breaching party for the loss she will be incurring for the land. This type of claim helps to compensate the non-breaching party for the loss and attempts to put her in as good a position or better had the contract not been breached.4.
What defenses might Doyle Contractors raise in the event it is sued by Ms. Woodside? Although Doyle Contractors paid $100,000 for owner financing, they still owed Ms. Woodside $400,000 to be paid over the next 10 years, but they can argue that they intentionally breached the contract because they are trying to avoid the remainder of the contract due to the fact that accord and satisfaction was not met and extinguishment of liability might be possible because of the fact that the Ohio Board of Agriculture is designating a large area solely for agricultural use and that includes a piece of the property.Doyle Contractors can also use the excuse of impossibility for getting out of the contract. They can argue that due to loss of the subject matter to the Ohio Board, who intends to preserve the area for agricultural uses only, thus barring any sort of commercial development they can be excused from performance.
Frustration of purpose is another defense Doyle Contractors can raise in the event they are sued by Ms. Woodside. This happens when both parties are able to perform, but due to circumstantial changes out of their reach, the contract may become null because it’s useless for them to honor the performance of the contract.5.
Ms. Woodside has stated that a farmer has approached her about taking over the mortgage payments for Doyle Contractors and receiving title to the land. Explain the contract principle(s) that would apply to such an arrangement, whether it would need to be in writing and whether you would need approval from Doyle Contractors.The contract principles that would need to be applied would be the basic principles of offer, acceptance and consideration. In this arrangement, Ms. Woodside would have to inform Doyle Contractors of the offer from the farmer, they would then need to consider as well as discuss it with Ms.
Woodside to verify it will be a written agreement and once they have all agreed to this decision, an acceptance needs to be in placed in order along with signatures from all three parties to validate the contract.6. If Ms. Woodside were to permit a farmer to take over Doyle Contractors’ mortgage payments, please draft a contract clause for the agreement between the farmer and Ms. Woodside that would protect Ms. Woodside should the land’s zoning be changed once again.
Should Ms. Woodside permit the farmer to take over Doyle Contractors’ payments, she would need to include the following clause in the contract between herself and the farmer to protect her from a repeat incident: “should the land zoning be changed in the future, both parties can surrender their rights and no fault is assigned to nonperformance under the mutual rescission agreement, the party having the right to sue for non-performance voluntarily relinquishes that right, parties involved can use accord and satisfaction to tender performance ‘good enough’ and agrees to change the original contract to reflect the actual occurrence. It is hereby noted that parties can have a substituted agreement to merge old agreement into a new one and parties mutually assent to change the terms of the contract should the modification need consideration”.
