WEEK FIVE: A CASE FOR REVIEW

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The point of this paper is to review a number of concepts we have discussed thus far in the semester.  We’ve already covered a lot of material, and the “big picture” can sometimes get lost in all of the details.  Take some time to sift through some of the discussions to put together some of the pieces which form that bigger picture. The class book: Contemporary Business Law, 8th Ed., Cheeseman.  ISBN: 9780133578164.  Publisher:  Pearson

Please review the case summary set out in your textbook on page 299, Case 16.8, E.A. Coronis Associates v. Gordon Construction Co.  You can find the full decision for the case here: https://law.justia.com/cases/new-jersey/appellate-division-published/1966/90-n-j-super-69-0.html

E.A. Coronis/Gordon Construction Case (Links to an external site.)

After reviewing the assigned reading materials/videos and the Gordon Construction case, please write a 3 -4 page paper which addresses the following questions:

  1.  What were the facts in the Gordon Construction case?
  2. In Gordon Construction, the General Contractor alleged that the subcontractor made a “firm offer” under the UCC.  Why do you think the General Contractor wanted the UCC to apply?  (That is, if the common law rule applied, what would the result be in this scenario?) 
  3. What is a firm offer?   In Gordon Construction, did the Court agree that the subcontractor made a firm offer?  Why or why not?
  4. In Gordon Construction, the General Contractor made an alternative argument.  That is, the General Contractor alleged that (even if the subcontractor did not make a firm offer) the subcontractor should be held liable under a theory of promissory estoppel.  What is promissory estoppel?  What elements must be established in order to prevail on this theory?  Is promissory estoppel a rule under the UCC or under common law?
  5. In Gordon Construction, the General Contractor exercised the “right to cover” when the subcontractor “backed out” of the deal.  What does that mean?  Under the circumstances, what was the amount of damages that the General Contractor sought to recover from the subcontractor?  How were those damages calculated?
  6. Legal scholars often talk about the “risk of loss” which attaches to situations involving contractors and subcontractors.   We talked about “risk of loss” in a slightly different context, but the same principles apply.  That is, if something bad happens in a contractual relationship, which party should shoulder the burden of any resulting loss?  In a construction contract, if a subcontractor submits a bid which contains a mathematical error, and the General Contractor relies upon that bid to put together a proposal for the overall project, which of the two parties should bear the burden, the risk of loss, for the subcontractor’s mistake?  Why?
  7. How did the Court decide the Gordon Construction case?  Why?