Question
George Lambert is the president and CEO of Sunset Bay Oyster Company (hereinafter referred to as Sunset). Sunset is a California corporation which has its
George Lambert is the president and CEO of Sunset Bay Oyster Company (hereinafter referred to as "Sunset"). Sunset is a California corporation which has its main oyster processing facility located in Point Reyes, California. Sunset's facility in Point Reyes is located inside the boundaries of Point Reyes National Seashore (hereinafter referred to as "Point Reyes"), a national park run by the United States Department of Interior. Over the past four years, Sunset has been very successful. In 2019, Sunset's operations brought in over $10 million in profits. Sunset's success is due to a lease agreement between itself and Point Reyes. The lease agreement, signed in March 2016, by George Lambert and Albert Jones, the Secretary of the Interior, allowed Sunset to lease 100 acres of Point Reyes to operate an oyster processing plant. The lease agreement allowed Sunset to lease this land at a low rate for a period of five years (until March, 2021) after which the land would revert back to Point Reyes. The lease agreement was to benefit not only Sunset and Point Reyes but also the local community. The lease helped to create thousands of jobs in the area and revitalized the local economy.
However, at the time the lease was signed in March 2016, by Mr. Jones and Mr. Lambert,
some verbal changes were made to the lease agreement. Specifically, Mr. Jones stated to
Mr. Lambert the following: "Look, this lease is economically beneficial for both of us; so
why limit it to 5 years? Let's extend the lease term to 10 years. How about it?" Lambert
agreed stating, "Sure, I'm all for it. Let's do 10 years!" Immediately after this
conversation, both men shook hands and signed the lease agreement. But the collateral oral agreement regarding the change in the lease term from 5 years to 10 years was never put in writing.From March, 2016 to January, 2021 things went well for Sunset. However, in January, 2021, local fisherman noticed the fish populations were dying. Some environmentalists picketed Sunset's facility, blaming it for the dying fish. However, scientists have been unable to find any evidence linking Sunset's operations to the dying fish populations. Despite lack of scientific evidence, local environmentalists became angry and took their complaints to Mr. Jones. Based on these complaints, Mr. Jones decided to pay a visit to the Sunset facility. In January, 2021, Mr. Jones visited Sunset's facility in Point Reyes. Without explanation, he abruptly told Mr. Lambert, "The lease is up, it's over, and you've got 30 days to shut down your operations and get out."
Shocked that the lease was suddenly terminated two months before it was to expire,
Sunset filed suit in Superior Court against the Department of the Interior for breach of the
lease agreement. In addition, Sunset wants to offer Mr. Lambert's testimony in court
regarding the verbal changes made to the written lease contract.
What are the 4 Issues regarding contracts and ethics? Rule? Application? Conclusion?Thank you for your help
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