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Instructions
Introduction:
We will look in more detail at the “objective theory
Instructions
Introduction:
We will look in more detail at the “objective theory of contract formation” in this discussion. In contract formation there has been a question of whether a parties’ insincere or joking intent could create a valid binding contract. The famous case that looked at this was Lucy v. Zehmer. In the module reading there is a link to the case and other explanatory materials. The court stated: “The mental assent of the parties is not requisite for the formation of a contract. If the words or other acts of one of the parties have but one reasonable meaning, his undisclosed intention is immaterial except when an unreasonable meaning which he attaches to his manifestations is known to the other party.” (https://en.wikipedia.org/wiki/Lucy_v._Zehmer)
In this discussion we will look at the concept of assent in the formation of contracts and review an outcome that relied on how this is defined in the law.
Learning Objectives:
Describe the sources of law.
Describe and apply the essential aspects of contracts from creation, performance, breach and remedies, including basic contract law from Article 2 of the Uniform Commercial Code.
Instructions and points:
Review the Facts below:
In the trial court:
“Defendant A. H. Zehmer and his wife, Ida S. Zehmer, owned a tract of land of 471.6 acres (190.8 ha) in Dinwiddie County, Virginia, known as the Ferguson Farm. Plaintiff W. O. Lucy had known Zehmer for many years and had previously expressed interest in purchasing the farm. Some years prior to the case, Zehmer had orally agreed to sell the farm to Lucy but later reconsidered and declined to complete the sale.
On December 20, 1952, Lucy entered the restaurant owned by Zehmer with a bottle of whiskey in his hand. Lucy and Zehmer consumed a significant quantity of distilled spirits and discussed the possible sale of the farm. Zehmer wrote on the back of the restaurant’s receipt stating, “We hereby agree to sell to W. O. Lucy the Ferguson Farm complete for $50,000.00, titlesatisfactory to buyer”. The note was signed by Zehmer and his wife.
Zehmer later alleged that his wife had initially balked at his request that she sign the instrument, but she relented when Zehmer assured her that his intent to sell the farm was merely in jest.
The next day, Lucy spoke to his brother, J.C. Lucy, about the purchase, and he hired an attorney to examine the title. After the attorney assured Lucy that the title was clear, she wrote a letter to Zehmer asking when he intended to close the deal. In his reply, Zehmer insisted that he had never intended to sell the farm and that the note signed by him and his wife was written in jest, consistent with the jovial atmosphere and drunken camaraderie the parties were sharing that evening.
Zehmer claimed on the witness stand that the circumstances were such that Lucy should have known he was too inebriated to agree to the sale. Depositions were taken, and the decree appealed from was entered. It held that the complainants had failed to establish their right to specific performance, and it dismissed their bill.”
The Higher Court reversed and held:
“Archibald C. Buchanan, who had served on the Supreme Court of Virginia since 1946, wrote for the unanimous court, holding that the record suggested that Zehmer was not intoxicated to the point of being unable to comprehend the nature and consequences of the instrument he executed. The circumstances surrounding the transaction were such that Lucy was justified in believing that it was a serious business transaction, rather than a mere jest. On the latter point, Buchanan quoted from the Restatement (First) of Contracts:
The mental assent of the parties is not requisite for the formation of a contract. If the words or other acts of one of the parties have but one reasonable meaning, his undisclosed intention is immaterial except when an unreasonable meaning which he attaches to his manifestations is known to the other party.
Buchanan further held that specific performance was the proper remedy for the plaintiff.”
Source: https://en.wikipedia.org/wiki/Lucy_v._Zehmer
Student’s Post (50 points)
Please provide typed responses submitted into the Module. Address each question and answer in complete sentences. Be sure to answer all parts of each question. You may need to refer to your textbook, the Internet and other resources in order to fully address the questions.
1. Define a Contract
2. List and explain the required elements for a valid, enforceable contract.
3. What contractual element was in question in this case?
4. How did the court resolve the issue? What legal remedy was applied?
5. Based on these facts, do you agree with the outcome of the case? What facts if changed do you believe might have changed this outcome?
*See the Module Reading for additional information and to get started students
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