Bus415 Week 3 Business Entities & Employment Issues - Foodmart Inc: Legal Issues

Foodmart, Inc.: Legal Issues

The scenarios discussed in this paper describe legal issues that have a probability of occurring in retail and e-commerce. These scenarios also contain a common element, contracts. Contracts may appear in written form or they may be agreed upon verbally and because of technology it is possible to enter contracts digitally by pressing an “I accept these terms” button on one’s computer screen.

A contract is not a contract unless the wording contains two very specific parts. A contract must include an agreement and it must contain a consideration. State statutes concerning contracts will vary and it can be of upmost importance to become aware of those state laws when entering a contract (Cheeseman, 2010).

Commercial Impracticability

FoodMart and Masterpiece Construction signed a contract in regard to Masterpiece Construction completing a renovation within a six-month period. The renovation described in the contract took place at the store located on Main Street in My Town; no mention of a sub-contractor exists within the details of the contract between FoodMart and Masterpiece Construction.

When Masterpiece realized they could not complete the job on time the contractors should have first contacted the current contracted jobs and made some revisions to involve staffing and time concerns for the customers’ peace of mind. Masterpiece could have mentioned the sub-contractor at this point and listened to how the people responded before letting FoodMart discover that a subcontractor would invariably become part of the deal.

When the work was completed poorly and FoodMart realized that the job had been subcontracted, FoodMart sued for breach of contract. Masterpiece Construction ended up using the Commercial Impracticability defense; this defense applies only when the three elements of the doctrine present a united front (Cohen, Seglias, Pallas, Greenhall, & Furman, n.d.). The three items, as stated by Cohen et al., which must be present are:

1. Something unexpected must have occurred

2. Risk of the occurrence must not be assumed

by the contract or by customer

3. Unexpected occurrence must have rendered

performance commercially impracticable

“Should a contractor prove impracticability of a contract it is entitled to recover its costs of attempting to perform the contract, provided that the contractor did not presume the risk of impossibility,” (Cohen et al., 8).

This scenario meets criteria number one and criteria number two; however Masterpiece is liable for the poor craftsmanship because no risk of the occurrence