Express versus Implied Contracts. Suppose that a local businessperson, McDougal, is a good friend of Krunch, the owner of a local candy store. Every day on his lunch hour McDougal goes into Krunche’s candy store and spends about five minutes looking at the candy. After examining Krunch’s candy and talking with krunch, McDougal usually buys one or two candy bars. One afternoon, Krunch, McDougal goes into Krunch’s candy shop, looks at the candy, and picks up a $1 candy bar. Seeing that Krunch is very busy, he catches Krunch’s eye, waves the candy bar at Krunch without saying a word, and walks out. Is there a Contract?

Running Head: UNIT 4 CASE STUDY                                                                                 1

 

 

 

 

 

 

Unit 4 Case Study

Geraldine Spinner

Business Law 1

LS311

November 14, 2011

 

 

 

 

 

UNIT 4 CASE STUDY                                                                                                           2

Express versus Implied Contracts. Suppose that a local businessperson, McDougal, is a good friend of Krunch, the owner of a local candy store. Every day on his lunch hour McDougal goes into Krunche’s candy store and spends about five minutes looking at the candy. After examining Krunch’s candy and talking with krunch, McDougal usually buys one or two candy bars. One afternoon, Krunch, McDougal goes into Krunch’s candy shop, looks at the candy, and picks up a $1 candy bar. Seeing that Krunch is very busy, he catches Krunch’s eye, waves the candy bar at Krunch without saying a word, and walks out. Is there a Contract?

Yes, there is a contract. The manner of conduct of the parties over time, the fact that Krunch sells candy and that McDougal has always followed a pattern where he speaks to Krunch and then buys candy indicates that they have an implied in fact contract. Just as a person who goes into a restaurant and order food from the menu, eat it, and then pay for his meal knowing that he is expected to pay once he has eaten. McDougal has indicated that he knows he is expected to pay for any candy that he picks up at the store and eats or walk out with because before he leaves the store, Krunch was busy with another customer so McDougal waves the candy bar so Krunch could see it. The action of the parties, the fact that Krunchs’ shop is a retail store where people pick up and then purchase are implied due to the situation leading to the creation of an implied in fact contract by McDougal when he picks up the candy and walks out with it.

When it comes to an implied contract, it is implied from the conduct of the parties which happened in this case. For an implied in fact contract to arise, certain requirements must be met. Those requirements are as followed:

UNIT 4 CASE STUDY                                                                                                        3

1) The plaintiff furnished some service or property. 2) The plaintiff expected to be paid for that service or property, and the defendant knew or should have known that payment was expected. 3) The defendant had a chance to reject the services or property and did not.

Here we have silence as acceptance, ordinarily, “silence cannot constitute acceptance, even if the offeror states, “By your silence and inaction, you will deemed to have accepted this offer”. This general rule applies because an offeree should not put under a burden of liability to act affirmatively in order to reject an offer. Silence can also operate as an acceptance when the offeree has had prior dealings with the offeror. For example: if a merchant routinely receives shipments from a supplier and in the past has always notified the supplier when defective goods are rejected, then silence constitutes acceptance. Also if a buyer solicits an offer specifying that certain terms and conditions are acceptable, and the seller makes the offer in response to the solicitation, the buyer has a duty to reject- that is, a duty to tell the seller that the offer is not acceptable. Failure to reject (silence) will operate as an acceptance” (Miller & Jentz 2008). In the case above it is identified as silence as acceptance.

 

 

 

 

 

 

UNIT 4 CASE STUDY                                                                                                             4

Reference

Miller, R., & Jentz, G., (2008). Fundamentals of business Law part 1. Boston, MA: Cengage.

 

 

 

 

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