Case Study:
Tina Tinker makes handmade Christmas ornaments. For the past 3 years, Serenity Store, a local boutique, has ordered Christmas ornaments from Tina, using a purchase order for the ornaments that Serenity sends to Tina in October to give her time to make the ornaments. Each year, Serenity increases the order- last year they had ordered 40 ornaments, paying Tina $7 per ornament. This year, Tina walked into Serenity Store on September 4 and the owner of Serenity, Owen Owens, told her that he wants to double the order from last year - 80 ornaments, to be delivered on November 15 to Serenity. Owen also said that he would pay $8 per ornament this year, for a total of $640. Their agreement is not put in writing; because of their previous business relationship, Tina does not think of it. Instead, they shake hands on the deal. Tina starts making ornaments, spending $250 on supplies. On November 15, Tina delivers the ornaments to Serenity Store. However, Owen tells her that he had ultimately decided to order ornaments from somebody else this year. He acknowledges that he remembers the same details of their conversation in September that she does but says that their handshake did not form a valid contract, and so he will not pay her for the ornaments. Tina is very upset and contacts your law firm for advice.
Issues to address:
1. Contract formation and the statute of frauds.
2. Source of contract law that would apply to this situation if there is a contract?
3. Is there promissory estoppel?
4. Possible remedies, even if your overall analysis concludes that it is doubtful that the contract would be enforceable.
5. Identifying relevant sources of law, including researching case law, for your analysis of Tina's situation.