Clark Kent is the president of American Way Manufacturing ("American Way") located in Spokane, WA. American Way is a start-up company that manufactures the LOISLANE Super Press ("LOISLANE"), a digitally enhanced printing press capable of printing and delivering all forms of news (papers, magazines, advertisements, etc.). The most exciting advancement in technology for the LOISLANE is its ability to quickly and inexpensively convert all forms of print media into Rapid Electronic Delivery (RPD). While digitally enhanced printing presses are more expensive than traditional presses, they are substantially more efficient. American Way has only been in business for a little over one year, but already has orders from major news markets throughout the United States. The Daily Buzz (located in Seattle) has seen substantial shrinkage in sales of its traditional print newspaper and wants to offer an electronic version in the hope of increasing sales. On January 8, Clark Kent met with Perry White, the president of the Daily Buzz. During their meeting, Clark described the advantages of the LOISLANE. They also discussed the number of presses needed, and the alterations that would be required to reconfigure the Daily Planet's pressroom to accommodate the unique size and performance power of the LOISLANE. The Daily Buzz thoroughly examined the LOISLANE and was especially impressed by its RPD feature. Based on their discussions, Clark gave Perry a draft set of plans that he sketched out on a legal pad. "These plans are pretty rough" said Clark, "but they should give you enough information to get started."

On January 15, Perry White received an email from Clark Kent. Clark Kent offered to sell 15 new LOISLANE printing presses for $42.5 million. Later that same day, Perry replied by email - "Price too high. Will pay $39.8 million." On January 16, Clark responded (again by email): "Can't sell at that price. Will accept $41.8 million." Over the next several weeks, the parties emailed numerous times, but could not settle on a contract price. On March 21, Clark sent Perry one more email: "If you will pay all cash, we can sell the presses for $40.9 million. This is our final offer. Hope it works for you." The offer contained all material terms, including a delivery schedule, warranties, and payment terms. The offer did not specify the mode of acceptance. On March 22, Perry called Clark's private office phone to accept the offer. Unfortunately, Clark was not available - he had been rushed to the hospital a few hours after he sent the March 21 email. Clark suffered from severe anxiety. Over the years, Clark had been hospitalized at least 5 times related to his anxiety. Fortunately, he normally recovered in just a few days. Perry left the following message on Clark's phone: "Hi Clark, this is Perry. Your last offer works for us. I'll buy 15 right away. Will send a message later today to confirm, but you may count on this voice message as my acceptance. Call me as soon as you can so we can work out the remaining details." Perry forgot to send the promised message. (NOTE: At the bottom of each email described above was an electronic impression of the party's signature, title, and the date and time each message was sent).

Later that day, Perry White called Zod Enterprises and rejected an outstanding offer by Zod to sell digital presses (the "Braniac 1000") to the Daily Planet. The Braniac 1000 was similar to the LOISLANE Super Press, but cost substantially more. Using the rough plans provided by Clark Kent, Perry White hired a building contractor (Jimmy Olsen) to make the necessary pressroom renovations to accommodate the 15 new LOISLANE printing presses. Jimmy started work immediately. By March 25, 20% of the renovation work had been completed.

On March 27, the President of the United States announced a ban on imports of all foreign manufactured steel, plastics and electronic component parts. This ban substantially increased the cost of manufacturing the LOISLANE printing press.After assessing the costs associated with this ban, Clark Kent realized he would lose $2.5 million on the last offer he sent to Perry White. Clark immediately sent Perry an email stating, "All outstanding offers are withdrawn." Perry was very upset. He emailed Clark: "Already accepted your offer. Check your phone message. Expect you to go forward with our contract." Perry wasn't sure, so he called Zod Enterprises to purchase the Brainiac 1000, but learned Zod's entire inventory had recently been sold to another buyer.

The Daily Buzz sues American Way for breach of contract. What is the likely outcome? As part of your analysis, you need to determine whether there was a valid and enforceable contract.As such, you need to examine and explain (in detail) the elements of a contract (i.e., whether there was a proper offer, acceptance, consideration, capacity and legality). You also need to discuss any and all possible defenses to enforcement of the contract (if there is one). You must also explain the arguments (in detail) each party will make, determine who is likely to win and what remedy (or remedies) may be available.

The Daily Buzz filed its lawsuit in Federal Court - the United States District Court, Eastern District of Washington.

For purposes of your analysis, you should assume that all parties are residents of the state of Washington.

DIRECTIONS:

A. Rule of Law: As part of your analysis, you must use the following rule of law:

Elements of a contract:

1. Offer,
2. Acceptance,
3. Consideration to support each promise,
4. Capacity to contract, and
5. Legal objective and purpose.

IMPORTANT NOTES - Read Carefully:

(1) The parties will vigorously dispute all aspects of the rule of law. That said, the facts do not clearly show that any party will win. Accordingly, your analysis must present clear, full and fair arguments for all parties.

(2) Your analysismust bein the form of an IRAC (i.e., Issue; Rule; Application; Conclusion).