Obligation of Good Faith, Research Paper Example

Introduction

The case study of father-and-son team Knarles and Barkley presents a comedy film’s worth of issues, errors, mistakes, and outright crimes. Some of the issues are relatively minor, while others are quite literally life-threatening. Every figure mentioned in the case study, from father and son to their employees and clients to their friends and peers, is responsible for committing some sort of transgression. Among the areas of legal concern are issues related to contract law, torts and crimes, jurisdiction, and agency.  In addition to these primary issues, the facts presented in the case study also raise questions about possible slander and defamation on the part of at least one of the subjects. While several of these issues are important, the central issue at stake involves a contract between the company operated by Knarles and Barkley and an individual named Chetum. While Knarles is away on business, Barkley enters into an agreement with Chetum which results in serious problems for a number of parties, including the direct participants and others who are indirectly involved. What makes this case study so compelling is that despite how ridiculous it seems, a closer examination reveals that every incident mentioned therein is entirely plausible.  It also demonstrates how one incident –in this case, the issue of the boiler which poisons the residents of a apartment building- does not happen in a vacuum. Instead, it is the nexus point of a confluence of actions and events, and the underlying cause of the incident can only be understood by looking backwards and seeing how all the forces at play collided in a dizzying display of negligence, liability, and criminality.

Overview

A comprehensive examination of the issue raised in this case study might best be framed by dividing the facts into two roughly equal parts. The first of these involves the interaction between the company operated by Knarles and Barkley and Ian Chetum, a Virginia-based property owner. Chetum operates an apartment building, and he contracts with Knarles and Barkley’s company to provide maintenance services for the property. Barkley, who is age seventeen, contracts with Chetum while Knarles is out of town. The facilities maintenance company (referred to hereafter as “The Company”) operated by Knarles and Barkley provides a range of services for a monthly fee (the amount of which varies according to the size of each property they serve).  In the course of providing maintenance services, The Company will occasionally replace worn or outdated equipment, such as water heaters and boilers. The primary issue in this case study involves repair work The Company performs on a defective boiler at Chetums property, and the problems that arose subsequent to the repair. A number of pertinent legal issues and areas of concern will be discussed in the following pages.

The second part of the discussion will examine the ancillary issues and events presented in the case study. To be clear, virtually every fact presented in the case study is related directly or tangentially to the incident involving the defective boiler; the decision to structure the discussion in two main parts is admittedly somewhat arbitrary. In a sense, the process of examining the case is akin to pulling at a few losses threads until the entire fabric unravels. The following discussion simply looks at the threads closer to the center of the case and those at the edges. While some of these threads may appear, at first glance, to be less pertinent to the case than others, the fact is that everything presented in the case study is relevant in one way or another to the issue of the defective boiler and the subsequent problems it caused for the apartment residents. Many of the issues at hand can be viewed through the lens of common law, but several issues will be considered in the context of more specific legal contexts.

The Contract between Chetum and The Company

The circumstances involving the agreement between Chetum and The Company are the central issues at stake in the case study. The boiler in Chetum’s building has stopped working, and he contacts The Company, seeking to hire them. Knarles is not present, and in his absence Barkley sends a signed contract to Chetum, who returns it with a check for the first month’s services. Even before the subsequent issues arise, the contract between The Company and Chetrum is problematic, as Barkley is only seventeen years old. Although Barkley is ostensibly operating as an agent of The Company, his status as a minor renders the contract voidable.

Contract formation has three primary components: the offer, acceptance, and consideration. The first component, the offer, contains the specific terms of the contract that impinge upon both parties, and demonstrates intent on the part of the offerer. In this context, then, Barkley clearly demonstrated the requisite intent when he sent the signed contract toChetum.  The second component, acceptance, occurred when Chetum also signed the contract and then sent payment to The Company.  The consideration in this case is the money in the agreed-upon monthly price for The Company’s services. These issues will be relevant shortly, when problems quickly arise.

Barkley sends The Company’s plumber (who, unbeknownst to Barkley and the plumber, has a lapsed license) to Chetum’s building, where the plumber swiftly determines that the non-functioning boiler is under recall by Housewarm, the company that manufactured it.  The boilerwas also purchased secondhand and improperly installed. It is clear that it needs to be removed and replaced immediately, yet Chetrum insists that it be repaired. The plumber tells Barkley that he will fix it if Barkley orders him to do so, as Barkley is “the boss.” Barkley counters that it is not his decision, but Chetum’s, and Chetum subsequently tells the plumber “fix it,” an order to which the plumber agrees.

This too is problematic, as the plumber is operating as an agent of The Company when he goes to the property, but he subsequently takes orders directly from Chetum. This situation again raises the issue of agency; when the plumber asks Chetum what he wants him to do, and Chetum tells him to fix the boiler, the plumber is in effect entering into an agreement directly with Chetum.  This results in an actual agency agreement between the plumber and Chetum, though under normal circumstances it would not necessarily absolve Barkely of responsibility; that issue is complicated by his age and the voidability of the contract. Because the plumber knew that the boiler was under recall, and that it was unlikely that it could be operated safely, the plumber is taking on enormous liability when he agrees to fix it.

Not surprisingly, the boiler fails to function properly, and it begins feeding carbon monoxide into the building, sickening a number of the apartment’s residents. Knarles, who has returned from his out-of-town trip in the interim, hears of the incident at Cetum’s property, though he is not immediately aware of the fact that Barkley contracted to work for Chetum in his absence. Once he is informed of Barkley’s actions, Knarles tells Chetum he “wants no part of the agreement” and tells Chetum he will return the money Chetum spent, less the charges for the plumber’s work. This again complicates the issue; aside from the obvious –when Chetum sues for breach of contract- Knarles is also assuming responsibility for the actions of the plumber by accepting payment for the plumber’s services. This muddies the waters in terms of agency, and raises questions about whether the plumber was acting as an agent of The Company or was operating under his own implied contract when he repaired the boiler.

Moreover, by repairing a boiler which he knew to be defective and under recall, the plumber may be considered negligent, both in terms of his agreement with Chetum and in his capacity as an agent of The Company (the former agreement does not negate the latter agency).  It is possible that the plumber would be considered negligent simply for attempting to repair the boiler when he knew it to be under recall. The fact that the boiler was under recall effectively meant that it could not be operated safely in any circumstances. Even if he was not considered to be negligent simply for trying to repair it (rather than for refusing to do so), he could be considered negligent for failing to repair it such that it did not vent carbon monoxide into the building. Further complicating the matter, of course, is the fact that the plumber was unlicensed at the time he performed the repairs. Even if that fact was not known at the time, it would likely be uncovered in any subsequent legal proceedings.

In terms of the circumstances of The Company’s involvement with Chetum, then, there are two primary areas of consideration. The first is the contract itself, and the question of whether The Company can successfully be sued for breach of contract. Because Barkley was a minor at the time he entered into the contract with Chetum, it is likely that The Company would prevail in its effort to void the contract. The fact that the contract would likely be subsequently voided does not, however, absolve the plumber of responsibility and liability.  Despite what would happen in terms of the contract, the plumber did perform the repairs as an agent of The Company, making them liable for any issue that arose subsequent to those repairs.

The Aftermath of the Defective Boiler Incident

Working outward from the problem of the defective boiler, after considering the central figures of Knarles, Barkley, Chetum, and the Plumber, the next set of figures to consider are the residents of the apartment building. Although the plumber, and by extension The Company, are all entangled in the liability issues involved in this case, it is Chetum who bears the most direct responsibility to the residents. He is the owner of the building and, based on the available facts, is the property manager and landlord. With that in mind, there is no way that Chetum can plead ignorance; he was well aware of the issue with the boiler (he did not just demand that it be repaired; he had also purchased it secondhand to begin with). Chetum can likely be charged with a number of criminal offenses for his actions, from reckless endangerment to battery.

In addition to the criminal charges, Chetum’s behavior constitutes a tort because his failed to act resulted in harm or loss for the residents. The main harm suffered is of course the exposure to carbon monoxide (which is potentially deadly; CHetum is fortunate that no one was killed). The primary loss is the loss of the use of their apartments during this incident (and for as opng as it takes to resolve the matter) Residents have a right to the quiet enjoyment of their domiciles, and Chetum’s negligence deprived them of that (Law.cornell.edu, 2014). Chetum  (and The Company and its agents) had a duty of care to the residents of the building, and failed to meet their obligations in that regard (Law.cornell.edu, 2014).

The residents of the apartment building, as plaintiffs, have a lengthy list of people to sue. Irrespective of any criminal issues, the torts involved include cases against Chetum, The Company, the plumber, and Housewarm.  While the boiler was under recall, that does not absolve Housewarm of responsibility. Despite the recall, the boiler remained in use, and its defect led to harm for the residents. Under product liability law, Housearm is liable for the injury or harm to the residents caused by its defective product. Of course Housewarm would likely fight the suit on the grounds that the product was under recall, that Chetum purchased it secondhand, and was using it despite being aware of the defective nature of the boiler. Product liability law asserts that a manufacturer is liable when injury arises when the defective product is used in a reasonable manner; Housewarm will argue that there was no “reasonable” use of the boiler once it had been recalled.

Contracts

One of the recurring themes in this case study is the issue of contracts. Virtually every relationship, conversation, or interaction with the parties discussed in the case study involves some form of contract. Some of these contracts are written; some are verbal, some are express; and some are implied. The tangled web of contracts will be at issue when the lawsuits in this case are filed. The Company seems to have a habit of developing written contracts that, once expired, are renewed verbally. This has been the case with a number of their clients, but is particularly relevant where the plumber is concerned. He had a written employment agreement with The Company , signed four years ago, in which The Company assumed responsibility for renewing the plumber’s license. According to the facts in the case study, the last written agreement was four years ago, and covered a two-year period. But his license was renewed after that two-year period ended, although it seems no new written agreement was signed. Assuming that the plumber is sued by the apartment residents (and/or Chetum, Housewarm, etc.), the issue of licensing will likely be a consideration, and the plumber will argue that The Company had an implied contract to renew his license.

The Uniform Commercial Code established standards for contracts and their provisions, and would be applicable in determining the validity and enforceability of the various contracts involved in this case study. Based on the available information, the contract between Chetum and The Company would, as noted previously, be considered void because Barkley was a minor at the time the contract was made. All of the other written, express, and implied contracts –such as those between The Company and the plumber, the plumber and Chetum, and Chetum and the residents, would be enforceable (Law.cornell.edu, 2014).

Jurisdiction

Untangling the threads of this case will involve a number of jurisdictional issues. Of primary consideration is the fact that The Company is located in Maryland, while Chetum’s property is located in Virginia. The jurisdiction for the residents’ suits against Chetum would be in Virginia, as they, Chetum, and the property are located in that state. Jurisdiction for cases between Chetum and The Company would be either in Virginia or Maryland; that is an issue that would have to be determined during the course of legal proceedings. The case study does not indicate where Housewarm is located, nor does it indicate the location of the salvage yard where it was purchased. Jurisdiction in any suits filed against those either of those organizations would be determined accordingly.

Defamation, Slander, and Libel

The Washington Post printed a story about the incident at Chetum’s building, and noted that some of the residents were sickened and displaced. There is no libel issue here because the newspaper simply reported the available facts. The responses of Stucko and Knarles, on the other hand, could potentially be seen as defamation. Knarles publicly described Chetum as a “crook,” which Chetum could argue was slander, though Knarles could that he was simply stating his opinion. Stucko made an assertion of a specific wrongdoing on the part of Chetum when he claimed that Chetum stole his HVAC plans. If Chetum sued Stucko for defamation, Stucko would have to prove that his assertions were true, or he would likely be guilty of slander.

Conclusion

It is clear that the events of this case raise a host of legal issues. This discussion touches on some of the main points, but also demonstrates how difficult it can be to make determinations about contracts, liability, jurisdiction, and other issues. At the center of this case is the repair and subsequent failure of a defective boiler, and the fallout when that failure leads to harm or injury. Working outward from that central issue, it can be seen how the actions (or failures to act) of the involved parties lead to liability or potential liability for nearly everyone involved. Trying to determine who is responsible for what, and where to argue the subsequent cases, is a complicated matter, and this case study shows  the challenges and difficulties involved in tort law.

References

Law.cornell.edu,. (2014). § 1-304. Obligation of Good Faith. | UCC – Uniform Commercial Code | LII / Legal Information Institute. Retrieved 19 May 2014, from http://www.law.cornell.edu/ucc/1/1-304

Law.cornell.edu,. (2014). § 1-306. Waiver or Renunciation of Claim or Right After Breach. | UCC – Uniform Commercial Code | LII / Legal Information Institute. Retrieved 19 May 2014, from http://www.law.cornell.edu/ucc/1/1-306

Law.cornell.edu,. (2014). § 2-106. Definitions: “Contract”; “Agreement”; “Contract for sale”; “Sale”; “Present sale”; “Conforming” to Contract; “Termination”; “Cancellation”. | UCC – Uniform Commercial Code | LII / Legal Information Institute. Retrieved 19 May 2014, from http://www.law.cornell.edu/ucc/2/2-106

Law.cornell.edu,. (2014). U.C.C. – Article 1 – General Provisions (2001) | UCC – Uniform Commercial Code | LII / Legal Information Institute. Retrieved 19 May 2014, from http://www.law.cornell.edu/ucc/1