Edward Johnson III, the CEO and principal owner of the world’s largest mutual fund company, Fidelity Investments, Inc., was a longtime tennis buddy of Richard Larson. In 1995, Johnson asked Larson, who had construction experience, to supervise the construction of a house on Long Pond, Mount Desert Island, Maine. Although they had no written contract, Larson agreed to take on the project for $6,700 per month plus lodging. At the end of the project in 1997, Johnson made a $175,000 cash payment to Larson, and he made arrangements for Larson to live rent-free on another Johnson property in the area called Pray’s Meadow in exchange for looking after Johnson’s extensive property interests inMaine. In the late summer of 1999, Johnson initiated a new project Chapter 12 Nature and Classes of Contracts: Contracting on the Internet 281 on the Long Pond property. Johnson had discussions with Larson about doing this project, but Larson asked to be paid his former rate, and Johnson balked because he had already hired a project manager. According to Johnson, at a later date he again asked Larson to take on the “shop project” as a favor and in consideration of continued rent-free use of the Pray’s Meadow home. Johnson stated that Larson agreed to do the job “pro bono” in exchange for the use of the house, and Johnson acknowledged that he told Larson he would “take care” of Larson at the end of the project, which could mean as much or as little as Johnson determined. Larson stated that Johnson told him that he would “take care of”

Larson if he would do the project and told him to “trust the Great Oracle”

(meaning Johnson, the highly successful businessperson). Larson sought payment in March 2000 and asked Johnson for “something on account” in April. Johnson offered Larson a loan. In August during a tennis match, Larson again asked Johnson to pay him. Johnson became incensed, and through an employee, he ended Larson’s participation in the project and asked him to vacate Pray’s Meadow. Larson complied and filed suit for payment for work performed at the rate of $6,700 per month. Did Larson have an express contract with Johnson?

What legal theory or theories could Larson utilize in his lawsuit? How would you decide this case if you believed Larson’s version of the facts? How would you decide the case if you believed Johnson’s version of the facts? [Larson v Johnson, 196 F Supp 2d 38 (D.Me 2002)]

Appendix