5. Roban Electronics was formed in January 2013 and had an initial staff of 15 w

Question

5. Roban Electronics was formed in January 2013 and had an initial staff of 15 workers. At a staff meeting at the end of May 2013, the owner of Roban Electronics told the staff that the company might not survive because it was using outdated equipment, and that it was likely that Roban would merge with another firm. The owner asked the employees to stay working for Roban if that happened, and promised the employees that the original 15 workers would each receive 2% of the value of the sale or merger as a reward for staying. In September 2017, Roban was bought by another firm, and the eight workers who were original employees that stayed sought to collect their 2% of the value of the sale. The company refused to pay on the grounds that there was no contract. Would this be a unilateral or bilateral contract? Would this contract be valid and enforceable? List the four elements of a valid, enforceable contract and explain how each element was or was not fulfilled by these facts.

Explanation / Answer

This would be a Unilateral Contract, as it was based on performance-contunuing the service and it seems no contract was agreed between the two merging companies for the same and cannot be enforced. The four elements of a legally enforceable contract -Mutual assent, legality, consideration and capacity.

In Mutual Assent, A contract must always have mutual assent to be binding. Mutual assent requires the involved parties to mutually agree on the terms of the contract. Once agreed, one party provides an offer and the other party accepts the offer under the mutually defined terms. This seems to have happenned

In Legality, Enforceable contracts involve legal activities within the scope of the law. And there is no illelagility here.

In Consideration, a binding contract must deliver one form of consideration for another form or have value that is being exchange. Here the value is services and has been offerred by the employees.

In Capactiy, in order for a contract to be enforceable, the parties of the contract must have the capacity, or ability, to complete their obligations as outlined within the contract. This is also satisfied

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