BUS-340 Contract Formation

Contracted Service

Name of Vendor

Offer

Method of Acceptance

Elements of Consideration

Factors That Affect Contract Formation

Venue

Hotel St. Michael’s

Hotel St. Michael’s has a form contract that provides the use of its grand ballroom, adjacent patio, and lush gardens on the specified event date at the cost of $2,000. The hotel’s kitchen will prepare hors d’oeuvres for 225 people at the cost of

$1,000. The hotel will provide and open bar for the event at a cost of

$2,000. Waitstaff will be present for the entire event; cost is included in the food and bar fees.

Hotel St. Michael’s will decorate the ballroom and adjacent patio with a variety of lilies for a cost of $500. The hotel will reserve 20 rooms for guests of

Hotel St. Michaels requires a 50% deposit, $2,750 due at the time of booking the event and signing the contract. An additional 25%,

$1,375 is due two weeks before the event and the final 25%, $1,375 is due on the day of the event. Rick agrees to these terms, the contract is signed by both parties and Rick pays the deposit.

Both parties are providing consideration by providing something of value to the other side that was bargained for. Hotel St. Michaels is providing value for the use of its facility and grounds, ballroom, patio, gardens, and guest rooms, as well as providing an open bar, hors d’oeuvres waitstaff, and flowers and in exchange Rick is providing consideration with his payment of

$5,500 for the hotel services. A valid offer is made and accepted with payment, creating a binding contract for both parties.

Fraud could be a factor.

Hotel St. Michael’s already booked the grand ballroom to another party on the specified date of the event and cannot host the event on the agreed upon date.

Hotel St. Michael’s is at full capacity the week of the event and cannot provide the agreed upon 20 rooms for the guest of the event.

When guests of the event book a room, the hotel charges them $250 a night instead of the agreed upon

$150.

After the initial deposit is made Rick fails to pay the additional 25% two weeks in advance.

Rick fails to pay the final 25% on the day of the event.

Rick cancels the event one month in advance however, the hotel does not refund his deposit.

the event for $150 a night, to be booked no less than 2 weeks in advance of the event. There is no charge to the event for this, it is a courtesy for the guests of the event. In the event of a cancellation, it must be made one month in advance of the event, at which time the $2,750 deposit is

refundable.

Catering

Red Snapper Seafood

Red Snapper has a form contract that provides an elegant surf and turf dinner. For starters, a mixed greens salad, followed by the main course which includes a choice of filet mignon prepared according to guest’s like, roasted chicken breast, and lobster tail and side choices of baked potatoes, roasted carrots, and macaroni and cheese. This package is $30 per person. Red Snapper requests to know the exact number of dinners needed and order paid

for in advance.

Counting all guests, there should be 205 people. To ensure there is enough food for everyone, Rick ordered 10 extra bringing the total to $6,450.

Payment is given to Red Snapper to ensure food for Celeste’s party with an agreement and payment given.

Catering does not include drinks. If more than 215 people show up, there will not be enough food. Both parties came to terms and payment was exchanged creating a contract between both parties with a written contract.

Fraud could be present, if Red Snapper were to not show up and not take calls from Rick. Signed receipt of payment and an agreement indicates that both parties understand and agree to terms.

Entertainment

Not Your Mom’s Karaoke

Not Your Mom’s Karaoke is $500 for a

four-hour session but offers additional band

Half payment of $850 equaling $425 with verbal

agreement of second payment equaling $425 at

Paying for half of the services upfront and half

once services are complete helps to ensure the

Equipment malfunction or failure. Failure to show up. Rick does not pay on time or at all.

members for shows that run longer; $850 for up to six hours. Verbal agreement with money exchanged in advance

as a deposit.

the conclusion of the event.

agreement is held up on both ends. This is a verbal agreement but also binding as money has been exchanged for goods.

Photography:

A Pic Above the Rest Photography and Filmography

Chrissy with A Pic Above the Rest Photography and Filmography, has a form contract that provides that it charges a flat rate of

$500 to photograph parties, for 3 total hours of services and film for the duration with digital copies included. Further, the contract provides that the client is entitled to all photos taken by the photographer and will receive editing services on 75 photos. A Pic Above the Rest Photography and Filmography sends the contract to Rick for his acceptance via email.

Rick accepts and signs the contract terms without modification, and emails it back to Chrissy at A Pic Above the Rest Photography and Filmography

Both parties are providing consideration by providing something of value to the other side that was bargained for. Rick provided concern through the payment of

$500, and A Pic Above the Rest Photography and Filmography is providing value by offering various photography and filmography services.

A Pic Above the Rest Photography and Filmography consists of two individuals at the party, one taking pictures, one filming. Chrissy oversees and does the editing on the pictures to ensure the best quality. Chrissy opened this business while being employed by another photography company, where she signed a non- compete agreement.

Bakery:

Creative Confections

Creative Confections has a form contract that charges $1,500 for a one of a kind custom cake design. The custom cake is a 5-tier cake, each tier a different flavor, adorned with handcrafted flowers. Additionally, the cake will have hand molded figurines of children and hand

painted plaques representative of

Creative Confections requires payment in full at the time of ordering the cake. Rick modifies the terms of the contract stating he will pay half of the cost, $750, when he places the order and the other $750 when the cake is delivered to the event. Creative Confections agrees to these new terms and both parties sign the contract. Rick pays the

$750.00 deposit.

Both parties are providing consideration by providing something of value to the other side that was bargained for. After bargaining the terms of the contract an exchange is made between Rick and Creative Confections.

Creative Confections is providing value by creating a custom-made cake for Celeste’s birthday, and Rick is providing consideration by

Fraud could be a factor.

Creative Confections fails to deliver the cake to the event.

Creative Confections has never made a cake of this magnitude and does not create the cake as agreed upon; failing to meet expectations.

Rick fails to pay the remaining 50% when the cake is delivered to the event.

Legality could be a factor.

Celeste’s world travels.

paying $1,500 for the cake.

Casey, the owner of Creative Confections left her job at Uptown Cakery to open her own business. She had signed at non-compete agreement with her former employer which prohibited her from working for or opening another bakery for 3 years after leaving her job. Casey opened Creative Confections only 6 months after leaving Uptown Cakery and Rick is her first client. Therefore, she

legally cannot make the cake.

Celeste’s 50^th Birthday Celebration

Celeste will soon be celebrating a big milestone in her life, her 50^th birthday. Celeste has been an inspiration and a source of hope and joy for many people. She has overcome many obstacles and worked tirelessly to become one of the top-rated pediatric heart surgeons in the country.

Celeste’s husband, Rick, wants to honor his wife by throwing her a birthday party that is an event to remember and will bring her many happy memories to carry her into the future.

Rick has planned an extravagant affair for his wife and is ready to find the perfect vendors to turn his vision into reality. Rick’s vision is for the party to take place in a grand ballroom with access to a patio area surrounded by beautifully landscaped gardens. Celeste has a fondness for all flowers; especially lilies, so he wants a variety of these flowers displayed throughout the ballroom and patio area.

Rick has created an extensive invitation list for the event. He has included family, friends, and colleagues, as well as current and former patients. Rick is expecting no less than 200 guests at the party; therefore, the venue must be able to comfortable accommodate upwards of 200 people. Since guests will be traveling from across the country to attend this event, it would be a bonus if the grand ballroom was in a hotel that could accommodate all the party guests’ lodging needs.

Since Rick wants time for everybody to enjoy the party, especially his wife, has planned for the event to take place from 5:00 pm to midnight. This allows time for all the evenings activities, as well as plenty of time for the guests to mingle and share in their appreciation of his wife. The festivities begin with a cocktail hour that includes an open bar and waiters serving hors d’oeuvres to the guests. The cocktail hour is followed by a formal sit-down dinner. After dinner guests can take to the dance floor where a cover band will play current hits, as well as Celeste’s favorite, classic rock. Soon after, Celeste and the party guests alike will be awed by the arrival of Celeste’s custom-made birthday cake inspired by

her love of children, flowers, and world travel.