The Business School
Semester Two, 2013
Assignment Topic Due Date: (Week 8) Friday 13th of September 2013 at 23:55pm.
You should submit your assignment and coversheet via UBonline. Your Assignment should be in MSWORD format and the signed coversheet should be in PDF format as a separate file. Each submission will then consist of two files. Please ensure both have your UB student number in your file name.
Dr. Doe (Doe) is a well-respected scientist who has just won the Nobel Prize in medicine for his work in developing a highly effective drug to prevent the common cold. He has recently been engaged in extensive negotiations with Francis Stein (Stein), the president of the Giant Drug Company (Giant), a pharmaceutical company that is interested in marketing the new drug.
On May 1, Doe signed and sent Stein the following letter:
I will accept a position as vice-president in charge of research for a period of four years at a salary of $500,000 per year.
On May 3, Stein received DoeÃ¢â‚¬â„¢s letter and called Doe and stated:
Ã¢â‚¬Å“Your salary request is too high. Will you reduce it to $300,000?Ã¢â‚¬Â
In the phone conversation, Doe replied:
Ã¢â‚¬Å“Your response is insulting! I am far too good a scientist to work for so little! ThatÃ¢â‚¬â„¢s as low as I can go.Ã¢â‚¬Â
Outraged by DoeÃ¢â‚¬â„¢s flip answer, Stein immediately sent the following letter to Doe:
I resent your statement. I am no longer interested in hiring you.
Later in the day, Stein changed his mind, and decided to agree to DoeÃ¢â‚¬â„¢s demands. Stein then sent a properly addressed, stamped express mail letter to Doe stating:
Ã¢â‚¬Å“Accept your terms, although I wish you would reconsider a lower salary.Ã¢â‚¬Â
On May 4, DoeÃ¢â‚¬â„¢s secretary received SteinÃ¢â‚¬â„¢s express mail letter of acceptance and placed it on his desk. SteinÃ¢â‚¬â„¢s first letter had not yet arrived. Before reading his mail on May 4, Doe secured a very lucrative contract as research director with MARK Drugs, a competitor of Giant. Doe immediately called Stein and stated:
Ã¢â‚¬Å“I just agreed to work for MARK Drugs.Ã¢â‚¬Â
Stein replied: Ã¢â‚¬Å“You canÃ¢â‚¬â„¢t, I already accepted your offer.Ã¢â‚¬Â
Stein consults you, asking if he has a valid contract with Doe and if so, whether Stein can force Doe to work for Giant.
Required: Answer the following two questions. In each case, give reasons for your answers, and support your reasons with case law.
a) Draft a memo fully analysing and discussing why there is or is not a valid contract.
b) Then assume that there is a valid contract, and fully analyse and discuss the remedies that might be available under that contract. (15 marks)
(Total: 30 marks)