Contracts Law: Disney World Jurassic Park Amusement Ride
The first question at issue in this study has to do with the termination of an employee for poor sales performance who entered into a non-compete agreement with the company, specifically that of Disney. The employee, Simpson agreed that he would not directly or indirectly compete with Disney as an agent, employer, broker, or contractor for one year from the date of termination. Simpson has argued that he has a wife and three children and that the non-compete agreement should not apply as he has a right to earn a living and this includes anywhere in the United States. Three questions are posed: (1) Is the restriction likely to be found reasonable by a court of law? (2) Does the agreement restrain trade? (3) What change if any would you make to the restrictive wording above for the future?
In answer to this question it must be understood that a non-compete contractual agreement is binding in a court of law. Therefore, Simpson would be legally held to this agreement. A non-compete contract does not restrain trade but restrains the individual from competing directly or indirectly for an agreed upon period following termination or ending of employment with a company. The noncompete agreement is a legal contract and one that is valid and upheld in a court proceedings. The statement of the non-compete being applicable in the United States would be removed.
Question Two
The second question in this study involves a collection agency named Ace Collections that has threatened to file a mechanics lien on a debt owed by a subcontractor, Pollack Excavating Inc. For $5,000. Investigation of the issue has shown that Pollack owed Jones Equipment this sum for equipment rentals and the debt seems valid. Ace is acting on behalf of Jones. The payment is reluctantly authorized since Pollack Excavating has gone bankrupt and it is desired that a mechanics lien be avoided. Following the payment a letter is received from Jones Equipment demanding payment of the $5,000 debt. A protest is made that Ace Collections was already paid and Jones states that Ace was terminated six months ago and no longer represents them. This question will answer as to what position can be taken with Jones in regards to the debt and how the law of agency applies to these facts and who should win.
An agency is a "legal relationship whereby one person acts for another. The person that acts for another is the agent and the person from whom the agent gets authority is the principal. Agency is such that can be created by contract "express, implied, oral or written, but ratification assent is given either to an act done by someone who had no previous authority to act or to act that exceeded the authority granted to an agent, by estoppel a person allows another to act for him/her to such an extent that a third party reasonably believes that an agency relationship exists, or necessity when a person acts for another in an emergency situation without express authority to do so." Because in this case, Ace is acting on behalf of Jones, and Ace is paid the monies, then because Ace implied a relationship with Jones and Ace had indeed worked for Jones and collected the monies, then the debt would be considered paid and Ace would be liable to pay Jones. It could be reasonably believed that Ace was indeed an agent of Jones.
Question Three
The third question in this study involves Disney subletting some of the set design and fabrication to Meehan Resources, Inc., which advertised itself as a woman owned company that regularly donated 5% of its revenues to environmental causes. A Disney audit revealed that Meehan was not woman owned and had never donated to environmental causes. Disney terminated the contract. Meehan calls you and brings attention to a clause in the Agreement, which reads: (Disney) has examined the contract, knows all the requirements, and is not relying upon any statement made by contractor in respect hereto. He threatens to sue if the termination is followed through. Three questions are posed: (1) Should you revoke the termination? Should you sue for fraud in the inducement? Because of the clause in the contract, Disney cannot reasonable terminate the contract on the grounds that Meehan Resources Inc. misrepresented the company. (2) Who is likely to prevail here between Disney and Meehan? (3) Meehan argues that there is a complete agreement here and parol evidence cannot...
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