Contracts and Ethics
Step 1: Read about the following cases:
On Sunday, October 6, 1974, the Leweiston Lodge of Elks sponsored a golf tournament at the Fairlawn Country Club in Poland, Maine. For promotional purposes, Marcel Motors, an automobile dealership, agreed to give any golfer who shot a hole-in-one a new 1974 Dodge Colt. Fliers advertising the tournament were posted in the Elks Club and sent to potential participants. On the day of the tournament, the 1974 Dodge Colt was parked near the clubhouse, with one of the posters conspicuously displayed on it. Alphee Chenard, Jr., who had seen the promotional literature regarding the hole-in-one offer, registered for the tournament and paid the requisite entrance fee. While playing the thirteenth hole of the golf course, in the presence of the other members of his foursome, Chenard shot a hole-in-one. When Marcel Motors refused to tender the automobile, Chenard sued for breach of contract. [Chenard v. Marcel Motors, 387 A.2d 596, 1978 Me. Lexis 911 (Maine 1978)]
– Was the contract a bilateral or unilateral contract?
-Do you think Chenard should have won?
-Was it ethical for Marcel Motors to refuse to give the automobile to Chenard?
Richard Zientara was friends with Chester and Bernice Kaszuba. All three were residents of Indiana. Bernice, who was employed in an Illinois tavern where
Illinois state lottery tickets were sold, had previously obtained lottery tickets for Zientara because Indiana did not have a state lottery. In early April 1984,
Zientara requested that Kaszuba purchase an Illinois lottery ticket for him. He gave Kaszuba the money for the ticket and the numbers 6-15-16-23-24-37.
Kaszuba purchased the ticket, but when it turned out to be the winning combination, worth $1,696,800, she refused to give the ticket to Zientara and
unsuccessfully tried to collect the money. Zientara filed suit against Kaszuba in Indiana, claiming the ticket and proceeds thereof. [Kaszuba v. Zientara,
506 N.E.2d 1, 1987 Ind. Lexis 874 (Ind. 1987)]
-Was the contract legal?
-Did the Kaszubas act ethically in this case?
Indiana Tri-City Plaza Bowl (Tri-City) leased a building from Charles H. Glueck for use as a bowling alley. The lease provided that Glueck was to provide
adequate paved parking for the building. The lease gave Tri-City the right to approve the plans for the construction and paving of the parking lot. When Glueck
submitted paving plans to Tri-City, it rejected the plans and withheld its approval. Tri-City argued that the plans needed to meet its personal satisfaction
before it had to approve them. Evidence showed that the plans were commercially reasonable in the circumstances. A lawsuit was filed between
Tri-City and Glueck. [Indiana Tri-City Plaza Bowl, Inc. v. Estate of Glueck, 22 N.E.2d 670, 1981 Ind.App. Lexis 1506 (Ind. App. 1981)]
-Who should have won, in your opinion?
-Was it ethical for Tri-City to reject the plans?
Step 2: Post your responses to the questions posed in each case to the discussion boarde
Case 1
– Was the contract bilateral or unilateral?
This was a unilateral contract as only one party offered a reward and, therefore, was bound by obligation (Rotondo, 2020). Marcel Motors was the offeror who proposed to reward any golfer who shot a hole-in-one with a Dodge Colt.
-Do you think Chenard should have won?
Chenard should have won the Dodge Colt. This was because, just like other players, he was promised that upon shooting a hole-in-one, he would get rewarded. His participation in the game was influenced by this reward which was even included in the advertising pamphlets.
-Was it ethical for Marcel Motors to refuse to give the automobile to Chenard?
No, it was unethical. Marcel Motors failed to adhere to its unilateral contract, and therefore, Chenard can take legal action against the company.
Case 2
-Was the contract legal?
Yes, the contract was verbal, and it was a mutual agreement between Zientara and Kaszuba (Müßgens & Priddat, 2022). They had both agreed that Kaszuba would purchase the tickets with the given combination for Zientara.
-Did the Kaszubas act ethically in this case?
Kaszuba did not act ethically. He agreed to purchase the ticket with the given combination without any conditions that he would keep the proceedings if it were the winning ticket. Therefore, Kaszuba did not respect their mutual agreement with Zientara, and he could be punished for breach of a verbal contract.
Case 3
-Who should have won, in your opinion?
Tri-City should have won. According to the lease, Tri-City had the permission and right to approve or reject the submitted plans. Therefore, Tri-City was exercising its right, which would be recognized even by the law as written in the lease.
-Was it ethical for Tri-City to reject the plans?
Yes, it was ethical for tri-city to reject the plans. If Glueck did not want Tri-City to have any say on the plans, it should not have provided Tri-City with the right to approve the plan, as Tri-City has more power over how these plans should look like.
References
Rotondo, A. (2020). Rethinking contracts: The heart of eric Berne’s transactional analysis. Transactional Analysis Journal, 50(3), 236-250.
Müßgens, J., & Priddat, B. P. (2022). Contracts as Cooperation: About an Implicit Ethics of Transactions. In The Relational View of Economics (pp. 311-331). Springer, Cham.
