[Solved] BUS 012A: Lucy v. Zehmer (Ch. 12) Case Brief

Facts:

• • Lucy offered 50,000 dollars to Zehmer to purchase the Ferguson Farm.
  • Zehmer stated that he wouldn’t since Lucy couldn’t or wouldn’t offer him 50,000 dollars.
  • Later in the night, Zehmer and Lucy drew up an agreement for the sale of Ferguson Farm for 50,000 dollars under the influence of alcohol.

Issue: The issue is determining whether the contract between Zehmer and Lucy is enforceable in a court of law.

 Rules: Objective theory of contracts. “In the field of contracts, as generally elsewhere, we must look to the outward expression of a person as manifesting his intention rather than to his secret and unexpressed intention. That law imputes to a person an intention corresponding to the reasonable meaning of his words and acts.”

Application: The court reviewed the facts and circumstances surrounding the formation of the Lucy-Zehmer agreement: what the parties said, how the parties acted, and the circumstances surrounding the formation of the alleged contract. The court noted that: (1) the parties wrote out a contract; (2) the discussion lasted 40 minutes or more before the agreement was signed; (3) Lucy objected to the first draft because it was written in the singular, and he wanted Mrs Zehmer to sign the agreement also; (4) the agreement was rewritten to meet the objection; (5) there was a discussion as to what was to be included in the sale; (6) the parties provided for examination of title; and, finally, (7) Zehmer provided Lucy with the written agreement and never asked for it back. All of these facts suggest that the parties had a serious, objective intent to be bound by their words and actions. The court reasoned that the parties had entered into a binding contract for the sale of the Ferguson Farm – their agreement was not a joke or a jest.

Conclusion: The court found for Lucy, overturning the trial court. The Zehmers were required to follow through with the sale of the Ferguson Farm to Lucy (specific performance).