Contract Concerns: Sonya Shazam V. Camille
CARDWARE initiated a contractual agreement with Sonya’s company, Shazam, to produce the 500 sweaters and their corresponding hats for a set price and Facts Camille, serving as a representative for CARDWARE, Inc, began corresponding with Sonya with the intent to have her business, Shazam Clothing Industries, fulfill an order for 500 knitted sweaters and matching knit hats. These garments were to be stitched with Candie Cardigans signature on a label sewn onto the bottom right side of the sweater. The hats would have the same label with matching number to its sweater but sewn on the right side of the turned up hat cuff. Sonya agreed to make each pair for $100. Camille, having planned on selling the pair for $300 each, was expected to make a profit of $200 a set. In the midst of selecting the yarn Sonya received a phone call and, so as to not delay the process, pushed a color palette and a piece of paper in Camille’s direction and directed her to “write the type of yarn …and exact dye lots”. Camille did so but failed to remember to give Sonya the 25% down payment.
The down payment has always been standard as the payment is used to purchase the materials. Sonya proceeded to make the products, without the down payment, and delivered them with a copy of invoice. At the bottom of the form Sonya had included the words “Payment Due Upon Receipt”. Camille, after much consideration, withdrew her interest in moving forward with the idea to sell the items as she feared they would not be as profitable as expected. The decision to cancel has caused Sonya to lose a sum of money, as well as valuable time that could have been used fulfilling the orders of other customers. Sonya has decided to take legal action against Camille for breaching their contract. Before she is eligible to do so, it must be confirmed that the contract is valid. To prove its validity, four elements must be fulfilled.
First, there must be a legitimate offer being made to do something for the other party. Once a channel of communication has been created, consideration must be present. This includes the promise of compensation for completing the task/creating the product that was discussed. The inclusion of consideration is the element that serves to persuade the party to commit to a contractual agreement. Upon creating a mutually agreed upon plan of action, both parties must agree upon the terms. This brings the parties to the last portion of the contract forming process in which they partake in a "meeting of the minds". The purpose of this is to confirm that both parties are aware of the terms of the contract.
In the case of Shazam Clothing Industries v. CARDWARE, Sonya was contacted by Camille with the intent to discuss a potential order. Camille then told Sonya that she had wanted 500 hat and sweater combinations stitched with a specific marking. Sonya then agreed to the terms and confirmed that she would be sewing the garments for $100 apiece. Due to an unforeseen phone call interrupting their meeting, the final overview of the transaction was not completed, and the down payment was unable to be collected.
The final discussion is imperative as it cements the terms of the contract, but its absence in this case does not necessarily invalidate the contractual agreement. This is because both the plaintiff and defendant had spoken at great length about the expectation and subsequent compensation upon the projects completion.
Another concern that may arise is the absence of a physical copy of the contract. Generally, a contract must contain the signatures of all parties involved, but a recent decision handed down by the Eighth Appellate District Court proved that this is not always necessary. In the case of Jatsek Constr. Co. v. Burton Scot Contrs., LLC, the courts enforced the “arbitration provision of a contract that was signed by only one party, demonstrating that a valid contract may form even if all parties have not signed the document”. This decision benefits the plaintiff as it adds validity to her contract. A question that was posed surrounds the past transactions between the parties and how it affects future business. The evidence provided suggests that the parties have a long history of doing business with one another, thus opening up the possibility to reference. This could benefit the plaintiff because in every other instance, she was given a down payment, therefore making it routine since there was no form of objection prior to the most recent agreement.
Moving forward, it is advised that the plaintiff issue a letter of demand. This document would be delivered to the defendant and include: the amount owed, the original invoice describing the services provided, the deadline for debt repayment (typically 14 days), the type of payment expected (direct debit details included).
In the closing paragraph, the plaintiff must make it clear that failure to comply will result in legal action.
