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Breach of Agreement

In: Other Topics

Submitted By lisachelle
Words 1097
Pages 5
MEMORANDUM

To: NPC
From: Lisa Bowman
Date: November 26, 2012
RE: Vivian v. Bernie, Richmond, Virginia

Summary of Facts

Vivian agrees to purchase Bernie’s car. Bernie requires Vivian to put down $1,000 and to have the car paid off by March 31st. In the agreement it is stated that if the buyer breaches the agreement, the seller may keep the buyer’s deposit, but the parties shall be limited to this remedy and only this remedy. Likewise, if the seller breaches the agreement, the seller must refund the purchaser’s deposit, but the parties shall be limited to this remedy and only this remedy. Vivian reads and signs the agreement. Later Vivian realizes that she is not going to be able to get the money together by the deadline. She calls Bernie to tell him that she is pulling out of the deal. Bernie says he is going to keep the deposit. Vivian sues for her deposit claiming there was no mutuality of consideration for the agreement and that the contract was therefore void.

Issue

Under Virginia law is Vivian correct in stating that there was no mutuality of consideration in the agreement between her and Bernie?

Applicable law

In American Agriculture Chemical Co. v. Kennedy & Crawford, 103 Va., 176, 178 (1904), the contract for the sale of fertilizer stated that the seller: …reserved the right to cancel this contract at any time we may deem proper, but in the event of such cancellation the provisions of this contract shall govern the closing of all business begun thereunder.

The Court stated that, as the plaintiff had the right to cancel at any time, the plaintiff never bound himself to the sale. “In the absence of such obligation on the part of the plaintiff, and of such right on the part of the defendants, there never was a binding engagement between the parties which a court of law would enforce.” Id at 178

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