Question
Jack Jones signed a three year contract with the athletic director of Midwestern University to be its baseball coach at a salary of $120,000 per
Jack Jones signed a three year contract with the athletic director of Midwestern University to be its baseball coach at a salary of $120,000 per year. The contract included a clause that provided that Midwestern University would pay Jack Jones $150,000 if it terminated Jack Jones' employment before the three years were up. Midwestern University terminated Jack Jones' employment after his first year of coaching, and Jack Jones found another coaching job with similar compensation within a month after his employment was terminated. The clause that provided Midwestern would pay Jack Jones $150,000 is
A. Unenforceable because $150,000 is greater than $120,000, which is the base amount Jack Jones was to be paid each year.
B. Unenforceable because the amount is unreasonably high.
C. Unenforceable because Jack Jones obtained another job coaching with similar compensation a month after his employment with Midwestern University ended.
D. Enforceable because it represents a reasonable forecast of how much money Jack Jones could potentially lose if his employment ended early at the time the contract between the parties was made.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started