Question

Subject: Business Law.

John signed a written agreement stating he would convey title to his home to Sally on August 14th. He had signed the agreement over a date with Sally. They had been seeing each other for three weeks. He said over after dinner wine, “I am a very wealthy attorney. Let me prove it to you….” He then wrote down on a piece of paper, “I will convey my home to you at 555 Camden, Beverly Hills, CA on June 4, 2016, at 9 AM. Please be at the house at that time to pick up your deed.” They both signed the paper. But, when Sally showed up at 9:30 AM on that day, John said, “You are a half hour late so the deal is off. You are in breach of contract!” Sally threatens to sue. Who will win the case and explain your reasoning?

Answer 1

Sally will win the case. Here the contract made in a piece of paper had satisfied all the requirements of a valid contract including the writing requirement with the sign of the parties. Though John was intoxicated after having wine, a contract entered by an intoxicated person would be valid if the person has understood the legal consequences of the agreement. Here John is not intoxicated much as he was aware of the terms mentioned in the agreement. The first contract entered by both of them would be invalid and the new contract would become enforceable. Though there is a breach related to time of performance mentioned in the contract, they have not agreed that ‘time is of the essence’ or the failure to perform the contract on time would be considered as material breach. There is no indication that the parties agreed that time was of the essence or that there was any compelling reason for Sally to be strictly on time. Hence the breach would not be considered as a material breach and John will not be discharged from performing his duty to convey the title. He can only collect damages if he has sustained any injuries due to the breach based on time.