EMgt 4110 Engineering Professionalism and Practice

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EMgt 4110 Engineering Professionalism and
Practice

• Week 15 Contracts

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Questions to think

• Is there a contract between Joey and the charity
  organization? If yes, what kind of contract is
  it?
• What would have made the contract void or
  voidable?
• What did they decide to do? Is it legal?

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Contracts

• Promise
• A promises to do something for B
• Consideration
• Form of payment by B to A in exchange for the
  promise
• Principle and agents
• Principle responsible for a service (NWA)
• Agent authorized by principle to interact with
  others (ex. AAA Travel)

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Types of contracts

• Bilateral vs. Unilateral
• Executory (in process)
• Executed (promise delivered, consideration paid)
• Express (terms and conditions nicely spelled out)
• Implied-in-fact (what actions of parties indicate)

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Types of contracts

• Quasi-contract (implied-in-law)
• Based on equity concept that unjust enrichment is
  just not fair
• Void (Invalid and produces no legal obligation)
• Voidable (can be set aside)
• Enforceable
• Meet all the basic requirements may be enforced
  in a court
• Unenforceable
• Verbal beyond statute of limitations illegal
  acts

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Formation Principles

• The parties must be competent to enter into the
  contract
• The subject matter of the contract must be
  proper
• There must be an agreement, consisting of an
  offer and an acceptance
• Consideration, something of value, must be given
  up by each side
• The agreement must be in proper form

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Contracts that need independent verification

• An agreement that by its terms is not to be
  performed within one year of the date of
  formation
• An agreement that by its terms is not to be
  performed within the lifetime of the promisor
• A promise to answer for the debt or default of
  another
• An agreement made upon consideration of marriage
  other than mutual promises to marry
• An agreement for the purchase or sale of real
  property or any fixture permanently attached to
  the land or for leasing real property for more
  than one year.
• Contracts for the sale of goods over a certain
  amount (typically 500), with certain exceptions.

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Important Points!

• Mutual understanding
• Intent measured by reasonable person standard
• Terms should be definite
• Who, what, where, when, why, how
• Duration of contract
• Termination of contract

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Types of Engineering Contracts

• Fixed Price
• Unit Price
• Cost Plus
• Design/Build Contracts
• Turnkey
• Fast Track

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Levels of performance

• Complete and satisfactory
• Substantial
• Good faith effort, but results not quite up to
  par
• Breach
• Partial
• Total
• Anticipatory

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Breach of contract issues

• Conditions
• Precedent
• Antecedent
• Time and timing
• Force majeure (Acts of God)
• Impracticality (UCC)
• Impossibility

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Remedies

• Damages
• Actual or compensatory
• Nominal
• Punitive/exemplary
• Liquidated (designated in contract)
• Restitution
• Specific performance (equity remedies)

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Arbitration

• Non-court approach
• Advantages
• Faster than courts
• Less expensive
• Rulings final and legally binding
• Disadvantages
• Remedy may be less than courts would award

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Discussion Questions (video)

• Phoebe and Joey attended a charity auction
  for Rachel's work. Joey believed the auction was
  a guessing game and made a 20,000 bid on a boat.
  Joey won the auction but did not have money to
  pay for it, and they had to figure out a way to
  get out of it.
• Is there a contract between Joey and the charity
  organization? If yes, what kind of contract is
  it?
• Under what circumstances is the contract void or
  voidable?
• What did they decide to do? Is it legal?

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Discussion Questions

• You have a charge account at Southern Building
  Supply. You walk into the store, pick up three
  hammers and a roll of time wire, and hold them in
  front of the bookkeeper, who nods affirmatively.
  You walk out of the store with the items, neither
  you nor the bookkeeper having spoken a word. Is
  there a contract between you and Southern,
  requiring you to pay for the four items?

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Discussion Questions

• Manning contracted to deliver by a certain date
  500 draft-fast drafting pens of assorted line
  width to Archibald Associates. Archibald
  intended to provide Manning with a list of the
  desired line widths and their quantities, but
  this intention was not made clear. Upon receiving
  the signed contract, Manning selected the mix of
  sizes and sent the order to Archibald, who
  refused to pay. If Manning brings a suit, will
  Archibald have to pay for the mixture of pens as
  provided?