Legal Mistakes Issues - Essay Example

Question Under the law of contract a mistake occurs when one or both parties to a contract have a belief that does not correspond with the actual facts. (Restatement of the Law Second, of Contracts Section 151) In other words a mistake occurs when there is an erroneous belief with respect to the contents or context of the contractual arrangements. In this sense the mistake can be either mutual or unilateral. A unilateral mistake occurs when only one party to the contract makes a mistake at the time of contracting and that mistake is directly related to the grounds upon which he entered into the agreement and it impacts the “agreed exchange of performance” to his detriment. (Restatement of the Law Second, of Contracts Section 153) Generally a unilateral mistake will not give rise to grounds for rescission of a contract. However, there are three specific circumstances in which the contract will not be enforced/rescinded on the ground of unilateral mistake. To start with the good faith requirement in the law of contract requires that parties to a contract do not take unfair advantage of the other party. To this end the courts will not enforce a contract in which there is a unilateral mistake if enforcement would be unconscionable. In circumstances where one party is aware of the mistake made by the other party and also aware that the mistaken party would not enter into the contract had he been aware of the mistake the enforcement of such a contract would be unfair and unconscionable. (Angelo, 11) At the heart of the matter is the general requirement that all contracts are required to be made and executed under principles of fair dealing. In keeping with this element of fair dealing a second ground permitting the rescission of a contract on the grounds of unilateral mistake is when there is evidence that the mistake is clerical or mathematical in nature. (M.F. Kemper Constr. Co. V. City of Los Angeles 37 Cal. 2d 696) What is required is the absence of purposive intent. (M.F. Kemper Constr. Co. V. City of Los Angeles 37 Cal. 2d 696) It is generally assumed that the parties to a contract enter into it for some benefit and should the clerical or mathematical mistake be such that it undermines a benefit to one party it can be rescinded. (M.F. Kemper Constr. Co. V. City of Los Angeles 37 Cal. 2d 696) However, an error in judgment will not justify rescission of a contract. (M.F. Kemper Constr. Co. V. City of Los Angeles 37 Cal. 2d 696) A third ground upon which the courts will rescind a contract on the grounds of unilateral mistake arises when the party relying on the unilateral mistake will suffer minimal damages. In other words once it is determined that risk allocation does not unfairly disadvantage the defendant, the mistaken party is entitled to rescission provided the mistake is unconscionable and was not an error in judgment but rather a clerical or mathematical error. (M.F. Kemper Constr. Co. V. City of Los Angeles 37 Cal. 2d 696) Question 2 The Equal Pay Act 1963 amends the Fair Labor Standards Act and requires that employers render equal pay among employees for equal work and skill. (Equal Pay Act 1963 Section 206(d)) Section 206 of the Equal Pay Act specifically forbids disparity in payment for equal work on the basis of gender. (Equal Pay Act 1963 Section 206(d)) On the facts both Bob and Martha are of equal skills and both have similar positions in coaching at Discrimination University. Be that as it may, Bob’s salary is at US$100,000 a year while Martha’s salary is at only US$30,000. This disparity appears to be a violation of the anti-discrimination mandate under the Equal Pay Act 1963. In order for Martha to succeed in a claim for discrimination within the meaning of the Equal Pay Act 1963 she will have to establish that the wages paid to her and Bob are different. (Glass Works v. Brennan, 417 U.S. 188, 196 (1974)) Additionally, Martha will have to prove that both she and Bob’s work responsibilities are substantially equal and that the work is perfomed under vastly similar circumstances. (Glass Works v. Brennan, 417 U.S. 188, 196 (1974)) On the facts provided, Martha should have no difficulty proving the first of these two elements. However, giving the disparity in the income of the teams that both Bob and Martha coach it is arguable that Bob whose teams turns over a greater income than Martha’s team works under far more pressure than Martha does. More over, the Equal Pay Act 1963 provides viable defenses to an anti-discrimination claim with respect to disparity in employee wages on the basis of gender. (Equal Pay Act 1963 Section 206) Therefore if Martha can make out a prima facie case against the employer the matter does not end there. The employer can avoid liability by taking advantage of four statutory defenses. (Glass Works v. Brennan, 417 U.S. 188, 196 (1974)) It may be that Bob has seniority over Martha in which case the employee can justifiably pay Bod more than Martha for similar work under similar conditions provided both are equally skilled. (Glass Works v. Brennan, 417 U.S. 188, 196 (1974)) Secondly, if the employer argues and proves that the pay is based on a merit system liability for discrimination on the basis of gender can be avoided. (Glass Works v. Brennan, 417 U.S. 188, 196 (1974)) Proof that Bob’s team earns more income than Martha’s team will likely be sufficient evidence that he payment is tendered on a merit system. Thirdly if there is evidence that the payments are rendered based on production quantity or quality liability will also be avoided. (Glass Works v. Brennan, 417 U.S. 188, 196 (1974)) Again the earnings of Bob’s team will likely suffice to counter the argument that Martha’s payment is made on the basis of sexual discrimination. A forth defense available to Discrimination University is also very broad and will provide a greater chance of a successful defense. If Discrimination University can prove that the payment disparity is based on any ground other than gender differences it will succeed in its defense. (Glass Works v. Brennan, 417 U.S. 188, 196 (1974)) Again the mere fact that the two teams make different financial contributions to the University’s income can hold up against a claim of discrimination on the grounds of gender differences. (Glass Works v. Brennan, 417 U.S. 188, 196 (1974)) Question 3 In the US there are no uniform codes with respect to product liability and codes vary from state to state with the law itself emanating from common law. (Epstein, 651-657) In general a consumer can pursue damages based on either a defect in the design or failure to pre-warn as well as a manufacture’s defect. (Epstein, 651-657) In general a claim will succeed in most state laws even if the product was not used correctly and the manufacture or other distributor could have reasonably foreseen that it could have been used incorrectly. (Epstein, 651-657) Moreover, in the US under the doctrine of strict liability a manufacturer is liable to pay damages for defects even if there was no evidence of negligence. (Epstein, 651-657) It therefore follows that although Sam only manufactures the mixer and imports the motor from another manufacturer, Sarah can claim damages from Sam since negligence is not a requirement under the doctrine of strict liability. Sam in turn as a consumer of the motor may third party the motor’s manufacturer. The doctrine of strict liability provides the weaker party who is generally the consumer to successfully claim damages whether or not he or she can substantiate that there was negligence on the part of the manufacturer. In all cases the law is aware of the inequality of bargaining position with respect to knowledge, expertise and finances. In which case the manufacturer and/or the supplier of defective goods has greater resources to remedy the defect, eliminate the risk and should always take those factors into account when manufacturing the goods. (Epstein, 651-657) In this regard, Sam could have ensured that the safety device was in place and the manufacturer supplying the motor should have warned him of the absence of the safety device. As a result both Sam and the motor’s manufacturer are jointly and severally liable to compensate Sarah for the injury to her fingers. Question 4 In order for Cindy to successfully bring a claim under the Americans with Disabilities Act she will have to prove that her inability to get pregnant is a disability within the meaning of the Act. According to the EEOC’s manual a disability under the Americans with Disabilities Act 1990 is required to be such that it disadvantages the claimant with respect to life’s major activities. (EEOC Compliance Manual, 29 CFR) Those major life activities are manual tasks such as seeing, hearing, walking, breathing, learning and working. (EEOC Compliance Manual, 29 CFR) According to these definitions of impairment with respect to life’s major activities it is very doubtful that Sarah can substantiate a claim for disability under the 1990 Act on the grounds that she cannot get pregnant. The US Supreme Court determined the question of procreation in Bragdon v Abbott 524 US 624 (1997) and whether or not it can be included as a major activity to the extent that it negatively impacts upon an individual’s ability to interact on a daily basis. (Bragdon v Abbott 524 US 624 (1997)) In this case the US Supreme Court determined that a plaintiff who had contracted HIV which inhibited the ability to reproduce was suffering from a disability under the 1990 Act. (Bragdon v Abbott 524 US 624 (1997)) Based on the US Supreme Court’s ruling in Bragdon, Cindy does in fact suffer from an impairment under the Americans With Disabilities Act 1990. On the facts of the case, she is unable to procreate because of stress levels at work. In order for her to reproduce her hours at work has to be reduced. Given the decision in Bragdon Cindy is unable to perform major life activities in the manner in which a normal person can and she therefore suffers from a disability under the 1990 Act. Question 5 An LLC is a limited liability company which allots income and liabilities according to the respective shares of its membership. (Keatinge, 383-384) A partnership is a business entity not unlike that of an LLC in which the partners jointly and severally share both the profits and the liabilities of a company based on their respective shares of the partnership. (Keatinge, 383-384) When examines the business and structure of LLCs and partnerships it is obvious that an LLC accrues to its shareholders greater liability protection than that afforded partnerships. For instance, unless an LLC is operated by sole proprietorship the veil of the company protects the individual assets of the shareholders from liability. (Keatinge, 383-384) This is not so with partnerships. A partner’s personal assets can be annexed to cover liabilities in the event the partnership cannot meet the demands of the claim against the partner in his or her share in the partnership. For tax purposed the partnership offers a far more satisfactory relaxation of income taxing. (Keatinge, 383-384) The partnership itself is not taxed although the individual income of the partners are taxable. (Keatinge, 383-384) This is not so for LLCs who must pay tax returns of the company’s earnings. In the final analysis, LLCs provide better protection against individual liabilities than partnerships do. On the other hand, partnerships provide better taxing protection than LLCs do. Sources Americans With Disabilities Act 1990 Bragdon v Abbott 524 US 624 (1997) Epstein, Richard.(2005) Cases and Materials on Torts. New York: Aspen Publishers. Equal Pay Act 1963 Forte, Angelo. (1999) Good Faith in Contract and Property Law. Hart Publishing Glass Works v. Brennan, 417 U.S. 188, 196 (1974) Keatinge, Robert. (1992) “The Limited Liability Company: A Study of the Emerging Entity.” Business Lawyer Vol. 47, 383-384. M.F. Kemper Constr. Co. V. City of Los Angeles 37 Cal. 2d 696 Restatement of the Law Second, of Contracts Read More