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Technical Consumer Products-Business Law Essay
Technical Consumer Products-Business Law Case Assignment
Technical Consumer Products, Inc. (TCP) makes and distributes energy-efficient lighting products. Emily Bahr was TCP’s district sales manager in Minnesota, North Dakota, and South Dakota when the company announced the details of a bonus plan. A district sales manager who achieved 100 percent year-over-year sales growth and a 42 percent gross margin would earn 200 percent of his or her base salary as a bonus. TCP retained absolute discretion to modify the plan. Bahr’s base salary was $42,500. Her final sales results for the year showed 113 percent year-over-year sales growth and a 42 percent gross margin. She anticipated a bonus of $85,945, but TCP could not afford to pay the bonuses as planned, and Bahr received only $34,229. In response to Bahr’s claim for breach of contract, TCP argued that the bonus plan was too indefinite to be an offer.
Whether TCP’ argument that the bonus plan with Bahr was too indefinite to be a valid offer is correct.
The TCP’s argument is untenable and hence the offer was not indefinite as the company claims.
The general legal principle of contract law is that to be valid, an offer must be definite in nature. What this means is that the offer should not be vague if it is to remain valid and hence where the offeror makes vague statements promises which cannot be legally enforced, the offer is said to be indefinite and cannot be enforceable. According to Miller, one of the main elements or requirements of a valid offer is that the terms of the offer have to be reasonably definite or certain so as to enable the ascertainment of the terms of the contract by the parties (215). There must also be a serious objective intention to be bound by the offer. Hence, expressions of opinion, statements of future intent, and preliminary negotiations do not constitute an offer (Miller, 216). Indefinite contracts are also those where the offeror does not clearly specify the subject matter of the offer or provide the offeree with full details regarding the offer. Such offers are usualy not enforceable by courts on public policy grounds since they do not represent the true intention and consent of the parties to be bound. One of the parties may not even know the true nature of the contractor what their obligations under the contract are and hence it would be unfair to hold that they are bound by the contract or offer......................GET A PLAGIARISM FREE COPY