Store Vs. Stevens

Marshall Ottina

Store v. Stevens; Quinn v. Stevens

In analyzing the various facets of these two cases, we must first look at the arrangement between Mr. Sam Stevens and the store to determine if, in fact, a legal contract was at hand. The first necessary element in a contract is the agreement. An agreement is reached when one party makes an offer, and the other party accepts. In this case, the store offered to purchase 1,000 units of Mr. Stevens’ product, his verbal assent to the store manager constitutes an acceptance of said offer.

Next, we determine the consideration of the deal. In a bilateral contract such as this, the consideration is a promise. Mr. Stevens promises to deliver his product to the store, who in turn makes a promise to

compensate him. The store, however, has made no such promise to Mr. Stevens. As no mention of any consideration, financial or otherwise, has ever been made, Mr. Stevens could challenge whether a contract was truly ever formed.

The third element of a contract deals with the legal capacity of both parties to enter into the deal. Based on external circumstances such as Sam’s status as a tenant, we can find that he is both of legal age and mental capability to agree to the contract. Operating under the assumption that the store manager has negotiating and purchasing power, contractual capacity is confirmed.

Finally, the contract must be legally enforceable. No contract may be deemed legal if the subject matter itself or the means of execution is illegal. If somehow Sam’s product was illegal, or perhaps if the store were to try to circumvent taxation on the shipment, the contract would be void. As we have no indication of any illegalities, the contract is deemed a legal object.

The crux of Mr. Stevens’ objection to the contract lies in the consideration. As far as we know, no certain terms of payment were ever discussed. Without consideration, a legal contract has not been formed. But the store may still seek to hold him responsible, possibly using either a quasi-contract or promissory estoppel.

A quasi-contract exists when one party is unjustly enriched at the expense of another. Unjust enrichment is defined as “The retention of a benefit conferred by another, that is not intended as a gift and is not legally justifiable, without offering compensation, in circumstances where compensation is reasonably expected.” Had the store placed a deposit for their order with Sam, contingent on delivery of the units, and Sam kept the money without delivering, that would establish a quasi-contract.

Should the store fail to prove that a quasi-contract existed, they could also show signs of promissory estoppel, which could in turn negate the need to show consideration.

Had Sam promised the units to the store, knowing the store is relying on them, which they do, and the only way to make it right in the eyes of the law is to enforce that promise, then the elements of promissory estoppel have been established. In all likelihood, by extending an offer to Sam, the store may have passed on another product, and also dedicated resources to marketing and selling Sam’s. Without the products in hand, the store is set up for a loss. Promissory estoppel may be their only recourse for mitigating those

losses.

Sam’s best chance in defending himself against the store relies upon the statute of frauds, and the Uniform Commercial Code. Making a reasonable assumption that the sale price for 1000 units of his product is greater than $500, a contract must be in writing in order to be enforced. Per Article 2 of the UCC:
“...a contract for the sale of goods for the price of $500 or more is not enforceable by way of action or defense unless there is some writing sufficient to indicate that a contract for sale has been made between the parties and signed by the party against whom enforcement is sought or by his authorized agent or broker.”

Using this defense, Mr. Stevens should be able to avoid any liability to the store.

His housing situation, however, present a new set of difficulties.

His landlord, Quinn, is seeking to evict Sam for violation of his lease agreement. Quinn is arguing that Sam is in violation of the covenant of quiet enjoyment and also a breach of conditions of the lease.

By working on an invention that makes a considerable amount of noise, the quality of life of the other tenants is significantly affected. Quinn is obligated to uphold the covenant of quiet enjoyment to all of his tenants. To protect all of his other tenants, and himself Quinn can evict Sam for the noise levels produced by his product. Were he to allow Sam to continue working there, the remaining tenants could sue Quinn for violating their covenants.

Once Sam’s work turned from merely an invention into a marketable, sellable product, he has turned himself from an inventor into a businessman. The terms of his lease specifically prohibit him from running a business from his domicile. These terms are there for the landlord’s protection. As businesses and residences are zoned differently, there are tax and insurance implications involved. A business being run illegally from inside his property puts a considerable amount of liability on Quinn’s

shoulders.

In a case from February 2015, a New York man was evicted for using the website Airbnb to rent out his Manhattan loft apartment. The website allows users to advertise and rent out their residences to tourists, as an alternative to hotels. Certainly it would seem to be a legal use of an owner-occupied residence. However, as a tenant, not an owner, the defendant, Henry Ikezi, was running an illegal hotel business out of his apartment. His eviction has opened the door for landlords throughout New York to evict other Airbnb-using tenants.

Sam’s objection to Quinn’s claims depends on a prior conversation the two shared. When Sam told Quinn about his invention, at which point Quinn wished him luck. The specifics of the conversation, however, are not given. It is not clear whether Sam disclosed the nature of the invention, or if he were planning to sell it while still operating out of the apartment.

It seems that Quinn is within his rights to evict Sam. While the specifics of whether or not Sam is running a business may hinge upon the ruling in his case with the store, his work is clearly detrimental to his neighbors. If the noise were to continue after the other tenants have complained to Quinn, it could be severe enough for the tenants to justify a constructive eviction.

It seems that Sam has two fronts to defend himself on in this matter. Should he prevail in his case against the store, he may be able to claim that he is not actually selling anything yet, and would not be forced to classify as a business. In terms of the noise, a 1943 case may be able to help him. In Twin Elm Management v. Banks, tenants of a New York apartment complex had complained to management about the piano-playing of another tenant. The ruling stated that
“To constitute a nuisance, the use of one's property must be unwarrantable, unreasonable or unlawful to the annoyance, inconvenience, discomfort or damage of another. Mere annoyance in and of itself does not create a nuisance or make the tenancy of the occupant undesirable.”

The ruling went on to say that as the offending tenant was a professional pianist, it would be unreasonable to forbid her from practicing her playing. Likewise, Sam could claim that to prevent him from working on his invention would also be unreasonable. By citing this case, Sam could avoid eviction. He would, however, most likely have to come to an agreement with his neighbors and landlord on an arrangement to avoid crossing over into an unlawful territory.