CONTRACT LAW

Fact Pattern

On May 15, Viva Voice, the President of Ritten Records, Inc., interviewed Juan Annum for the position of sales manager. The parties reached agreement on a one-year period of employment, beginning on June 1 at an annual salary of $75,000. At the end of the interview, Viva tore a piece of paper from a blank pad and wrote "Call pers. Dept. to enroll Juan Annum as a sales mgr. - 1-yr contract starting 6/1. Pay $75,000 p.a." She told Juan that the purpose of the note was to remind her to call the personnel department so that they would put him on the payroll from June.

After the meeting, Juan resigned from his current employment by giving the required two weeks' notice. On May 23, he received a memo in the mail from the personnel department of Ritten Records, Inc. It was written on the company's letterhead and said simply, "We understand that you will be joining us on June 1. Please come in as soon as convenient to fill out the necessary tax forms."

On May 27, before he had a chance to go to the personnel office, Juan received a letter in the mail from Viva on the company's letterhead.

It Read:

Dear Juan,

I was happy to be able to extend an offer of employment to you last week. I regret, however, that since then we have re-evaluated our earnings for the last quarter and find them disappointing. We have therefore decided not to hire any new employees at this time. I am sorry that we cannot use your services. I am sure that a person of your talents will have no difficulty in finding a suitable position elsewhere.

Sincerely

Viva Voice

President

Question( Issue) 1 : Can Ritten Records, Inc. get away with this?

Rubric Elements

1. explain why or why not a contract was ever entered into
2. discuss the elements of contract formation
3. discuss the statute of frauds in their assignment
4. discuss any other defenses that might or might not apply