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Contract law question.


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Consider the following scenario:

An oral agreement has been in place for 10 years. There is not a question as to whether the agreement is valid, or not.

Recently, one of the parties breached that agreement. The other party threatened to sue for breach of agreement. The party who breached the agreement then unilaterally claimed to terminate this agreement.

My question is about the unilateral termination of that agreement by the offending party. If there was a "meeting of the minds" which created the agreement, then wouldn't also there need to be a "meeting of the minds" to terminate the same agreement?

According to the agreement, either party could have abruptly chosen to terminate the agreement by contacting the other party but the offending party breached the agreement first and only decided to terminate the agreement once the offended party threatened to sue.

There was a fledgling "meeting of the minds" concerning the breach of agreement but there was no discussion by the offended party in regards to the termination of the agreement...only about the breach of agreement.

So, can one breach an agreement and then terminate the agreement once threatened with suit?

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Hopefully, one of the real lawyers will jump in here...but...its my understanding that oral agreements aren't worth the paper they're NOT written on. If its not in writing, it didn't happen.

You might indeed sue, but I'm pretty sure you'd need a third party to testify they were present when your minds met.

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Well, this is an answer to another question which would naturally come up with oral agreements...that's why I said that there was not a question as to whether there was an agreement, or not.

I mentioned the "oral" part because, in my scenario, there is nothing in writing, which makes the terms of the agreement a little allusive. But, as with any agreement, it is the performance of the parties during the agreement period which set the terms, not the agreement itself. That is, the agreement could start out with one set of terms but, over time, the parties could performed differently and the terms would adjust themselves to the performance itself as long as no one complained about the changes.

In addition, this oral agreement has been in effect for 10 years. It cannot and has not been denied.

The problem is that one party breached the agreement and has claimed to terminated that agreement after the threat of suit for those breaches.

It would seem to me that terminating an agreement during breach of agreement negotiations would not follow appropriate procedure.

Would not a similar "meeting of the minds" be required to terminate the agreement which created the agreement?

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Actually, I just read an article which cites a case where a famous actor sued for breach of "oral" contract and won. I haven't read the case yet but here is the summary:

The recent case, Pearce v. Manhattan Ensemble Theater, Inc. involves the plaintiff actress, whose stage name is Patty Duke, and her claim that the defendant breached the contract under which she was hired to portray former Israeli Prime Minister Golda Meir in the touring company for the play Golda’s Balcony. The alleged oral agreement was that she would perform as Golda Meir from September 2005 to on or about May 2006, would accept no other entertainment engagements at that time, and would receive specified compensation. In addition, she would receive no less than 15 weeks of full salary even if the show closed before the end of the scheduled run. Thereafter, the defendants distributed press releases and advertising that she would appear in the play.

The complaint further alleges that the defendants terminated the agreement on the incorrect belief that plaintiff’s heart surgery had disabled her and hired Valerie Harper as a replacement actress.

The defendant moved to dismiss the breach of contract claim on the basis of the Statute of Fraud, claiming that the complaint alleges that the agreement was made in December 2004 but that the tour was not to conclude until May 2006, which is a period of more than one year.

The Court upheld the claim at this stage of the proceeding since, the Court found, the contract could have been performed within one year if the producer had exercised the option to close the show early and only had the obligation to pay the plaintiff “no fewer than 15 weeks of full salary.” Therefore, the oral agreement could have been performed within one year, and as stated above, this is sufficient to avoid the provisions of the Statutes of Fraud.

http://www.photosource.com/psn_full.php?type=Headlines&id=494

The issue here was Statute of Frauds but the point is that an oral agreement is worth the paper it is not written on if you have supporting evidence.

The Statute of Frauds is not an issue in my case since the performance of the terms could have easily been completed in a year's time...the oral contract just kept renewing itself as the years went by.

Anyway, with Statute of Frauds and the oral thingy out of the way...can one party breach an agreement and then unilaterally terminate the agreement once the aggrieved party threatens to sue for breach of agreement?

Doesn't there have to be a meeting of the minds to talk about the breach, terms of agreement, and what is expected of each party before the agreement can be officially dissolved?

And, wouldn't the breach have to be worked out before terminating the agreement - especially if the aggrieved party wants to continue with the agreement?

What is protocol in a written contract under the same circumstances?

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Doesn't there have to be a meeting of the minds to talk about the breach, terms of agreement, and what is expected of each party before the agreement can be officially dissolved?

No, there does not. "Meeting of the minds" refers to contract "formation," not "termination."

To that, you have provided little detail other than the fact that your agreement was "oral" and had been in place over a number of years.

There are several other material facts which need to be known before it can be determined whether a breach occurred. What was the subject matter of the contract? Did it involve the sale of goods? Are one or both of the parties merchants? Was this some type of employment or personal services contact, perhaps?

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"Meeting of the minds" refers to contract "formation," not "termination."

This is the problem I am having. I can find plenty of information about forming a contract but nothing about terminating a contract.

A "written" contract would normally contain what procedures would take place to terminate a contract.

The oral agreement which I have been seeking information for concerns a waste management service provided to a larger company. This company contacted me over 10 years ago about a waste product which could be recycled. The terms were that I would remove all of this particular waste at no cost to this company. I was able to recycle this waste product and make a modest income.

Recently, a new waste management person hired by this company decided that he would unilaterally separate a portion of the waste out, sell it, put the money in this company's pocket and throw the remaining totally junk waste product in the landfill.

This new person was told about the agreement which had been going on for years, that he should inform me of the abrupt change in the agreement. He acknowledge that he would, but never did.

I confronted this new person, explained the agreement, and sent a follow-up letter highlighting the details. In this letter I also told him that it would be necessary for me to inform the DNR that he was inappropriately using the landfill as a way to net a profit for the company. I told him that he had 15 days to respond.

Before the 15 days were up, I had a response from the company's legal counsel claiming to terminate the "relationship" and to direct all communication to him.

What this tells me is that, "Hey, we want to pay you off and sweep this matter under the rug".

Oddly enough, it was a section of the DNR which arrainged the meeting of the minds over 10 years ago. I make infrequent reports to this section and they sometimes call me in reference to my waste management business. In short, I have a working relationship with them and they will no doubt be interested in any report I make about the misuse of the landfill.

I will be sending letters out to this DNR section, the head of the landfill, and a few other parties I think who will be interested. My goal is to force the company to continue the agreement. If I were looking for a quick pay off I could deal directly with the lawyer.

I'm pretty sure that the DNR ploy will work. I've used it before to help troubled accounts to understand that the agreement I have with them is a pretty good agreement.

But, I'm looking at other options. I think the fact that I have been providing a beneficial service for the company, and for the community, for several years is undeniable. And, the fact that the attorney claims to terminate the "relationship" is admitting that there was an agreement in place. A rose by any other name is still a rose.

So there's the story. If I sue and send out subpoenas to the DNR and long-time employees of the company, I can establish that there has been an agreement in effect for over 10 years and that the agreement included me dealing with all the waste, not just the "junk" waste.

In my personal dealings with attorneys, I've never had one respond in a timely fashion concerning a time contraint which I have personally placed on the situation.

The company's legal counsel reponding before the 15 days was up tells me that the company is concerned.

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I'd like to build the case as much as I can before consulting an attorney. I will be sending letters out to the different parties involved to see what kind of response I will get from each.

I was hoping I could find the elements of terminating an oral agreement. I just don't think that an offending party should be able to terminate an agreement while still in negotiations on a breach of contract.

To me it's kind of like a summary judgment where a case can not be decided when there are material facts still in dispute.

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If I were the opposing lawyer (if I was a lawyer), I would argue that since the oral agreemnt contained no stipulations for how the agreement would be terminated, then the new guy deciding to diipose of his stuff elsewhere could not be considered a breach of those terms. And, as a courtesy, they notified you that the contract was terminated.

I think you need a better lawyer than I am not.

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the oral agreemnt contained no stipulations for how the agreement would be terminated

This is why I think there should have been a meeting of the minds...which was actually in process when the attorney, not the new guy, decided to terminate the agreement.

The breach itself was not the termination of the agreement. The breach began before the termination of the agreement by the new guy unilaterally selling a portion of the good waste and sending the bad waste to the landfill. The end game was that I was making less money and having to deal with more bad waste while the new guy was making a clear profit for the company.

Utilizing the landfill for profit, when the company had other places to send the bad waste, will not be looked upon favorably by the local waste management officials.

I'll be playing this card shortly.

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