Mukund Patel Business Law Chapter 9 Case Briefs

9-1 FOX v. MOUNTAIN WEST ELECTRIC, INC.

Facts: Lockheed Martin Idaho Technical Company (LMITCO) requested bids to contract fire alarm installations. Mountain West Electric, Inc. (MWE) and Fox met and discussed working together on this project at a prebid meeting. MWE was in the business of electrical wiring and Fox in the business of installing fire alarm systems Parties prepared a document showing agreement to work together on this project. Specifically Fox would work under MWE. 1996, Fox began performing services under the MWE manager Many changes were made to the contract during the course of the project August 7th a dispute arose about the contract over the compensation for change orders MWE wanted a flow down procedure and Fox wanted a bidding procedure. December 9th Fox left the project and MWE contracted with LSS, another company July 1998 Fox filed a complaint seeking monetary damage representing money due and owing for materials and services provided. MWE counterclaimed seeking monetary damages resulting from the alleged breach of the agreement.

Issue: Fox and MWE disagreed on compensations methods. There were many changes to the contract.

Decision: District Court found that an implied-in-fact contract existed based on the industry standards flow- down method of compensation

Court ruled in favor of MWE.

Supreme Court recognized 3 types of contractual relationships. Fox argued that the UCC should be used to make the ruling because the contract was predominately based on goods versus services. The Supreme Court agreed with the district courts findings that the contract was service based. They affirmed the decision of the district court.

Precedent: The court of appeals: Pittsley v. Houser. The court must look at the predominant factor of the transaction to see if UCC applies.

Case 9-2 STEINBURG v. CHICAGO MEDICAL SCHOOL Facts: December 1973 Robert Steinberg applied for admission to the Chicago Medical school and paid an application fee of $15. His application was rejected Steinberg filed an action against the school claiming that they failed to evaluate his application according to the academic criteria. He claimed that the schools application process was based upon nonacademic considerations such as financial status and familial relationships. He claims that the school had breached the contract created between him and the school when they accepted his application fee. The School says that no such contract was made during the transaction and filed for a motion to dismiss The Court sustained. Steinberg states that the breach of the contract is a violation of due process and equal protection. The school counters that informational bulletins do not make such contracts.

Issue: Steinberg feels that his application was rejected based upon nonacademic considerations and that is a violation of a contract created when the school accepted his application and fee. The school disagrees and says no such contract is created by their bulletin.

Court Ruling: Agree with Steinbergs position A contract does exist and he should be judged on the stated school criteria. Reversed and remanded.