Cengage Advantage Books: Business Law Today, The Essentials 10th Edition by Roger LeRoy Miller

تمرين 1

Powerhouse Custom Homes, Inc. v. 84 Lumber Co.
FACTS Powerhouse Custom Homes, Inc., owed $95,260.42 to 84 Lumber Company under a credit agreement. When Powerhouse failed to pay, 84 Lumber filed a suit to collect. During mediation, the parties agreed to a deadline for objections to whatever agreement they might reach. If there was no objection, the agreement would be binding. Powerhouse then offered to pay less than the amount owed, and 84 Lumber did not respond. Powerhouse argued that 84 Lumber had accepted the offer by not objecting to it within the deadline.
ISSUE Did 84 Lumber, by failing to object to Powerhouse's proposal to settle the debt for less than was owed, unequivocally accept the offer?
DECISION No. The court held that for a contract to be formed, an offer must be accepted unequivocally. Without such an acceptance, there is no enforceable contract.
REASON Powerhouse made an offer of a proposed settlement, but 84 Lumber did not communicate its acceptance. Thus, the court reasoned that the parties had not reached an agreement. Because 84 Lumber had not agreed to Powerhouse's proposal, the ten-day deadline did not apply. Powerhouse was liable for the entire debt, plus interest, attorneys' fees, and costs.
CRITICAL THINKING-Economic Consideration Why do judgments often include awards of interest, attorneys' fees, and costs?