Consider the following scenario:
Southwest Industries, Inc. is a corporation that provides technical services. Suppose Mike Youngblood and TDI Technical Services are Southwest’s former Vice President of Operations and Southwest’s competitor, respectively.
On June 26, 1999, Youngblood signed an employment contract with Southwest to work as a recruiter making $29.50 per hour. The contract contained a noncompetition agreement preventing Youngblood from working for a competitor of Southwest for one year within a 100-mile radius following termination of employment with Southwest.
Prior to signing the contract, Youngblood talked to Peter Schwimmer, Southwest’s owner and president, on the phone about the job. Schwimmer did not discuss or mention the noncompete agreement with Youngblood on the phone this first time.
Schwimmer and Youngblood later met in person to discuss the job. Schwimmer has stated that he recalls briefly telling Youngblood that he would be expected to sign an employment contract that contained a noncompete agreement.
Youngblood stated that he does not remember whether Schwimmer mentioned the noncompete agreement during this meeting. Youngblood did not ask for a draft of the contract or noncompete agreement and Schwimmer did not give any to Youngblood.
Later, Youngblood called Schwimmer to further discuss the job offer and accept the position. Schwimmer says that he does not remember specifically telling Youngblood about the noncompete agreement, but recalls that he “usually” tells new hires about noncompete agreements. Youngblood again has stated that he does not remember whether Schwimmer mentioned the noncompete agreement during this conversation. Again, Youngblood did not ask for a draft of the contract or noncompete agreement and Schwimmer did not give any to Youngblood.
Youngblood accepted the position and on June 26, 1999, and signed the employment contract including the noncompete agreement. Youngblood has stated that he did not understand the noncompete agreement. Youngblood did not ask questions or get an independent review of the contract before he signed it.
Before beginning working for Southwest, Youngblood worked for Moller Financial Corporation. Youngblood quit his job at Moller after Schwimmer offered him the job. Youngblood signed the noncompete agreement after he quit his job at Moller.
Youngblood worked for Southwest until April 5, 2003, when Youngblood quit and started to work for TDI. Youngblood’s title at Southwest before he quit was Vice President of Operations with an annual salary around $100,000, plus rent and car allowances.
Discuss the facts and issues. Identify where the offer took place and where the acceptance took place. Provide reasoning for your conclusions. Post the group’s final result in the 3-3 Formation of a Contract: Class Forum.
• Identify the various elements of a contract
• Distinguish between bilateral and unilateral contracts
• Compare and contrast the concepts of consideration, preexisting legal obligation and past consideration
• Explain all the ways an offer can be accepted and terminated
• Discuss and critique the fundamental idea underlying promissory estoppel