Question for contracts hypo Forum

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Thrive

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Question for contracts hypo

Post by Thrive » Fri Aug 22, 2014 6:01 pm

Hey! We are currently studying consideration and I came across this hypo and gave it an attempt. I am trying to learn to think like a lawyer and I would like anyone who is willing to give me tips to go ahead. Anyway, here is the hypo and here is my attempt at a reply:

Workers' compensation is a form of government organized insurance that provides wage replacement and medical benefits for employees who are injured in the course of employment, in exchange for the employee's relinquishing the right to sue the employer for negligence. In a job related accident, Dale Warren Dyer, an at-ell employee, lost his right foot. His employer placed him on a paid leave of absence for a year, after which he returned to work as a foreman, the job he had held before the injury. A year later he was laid off. Dyer sued for breach of contract, claiming that he believed he had a valid clam against his employer for his personal injury, and that he had forborne pursing this claim because the employer had promised him "lifetime employment." In reply, the employer asserts that this promise, even if it had been made, would be unenforceable for lack of consideration since the state workers' compensation act states that: "that rights and remedies provided in this chapter...for an employee on account of injury...for which benefits under this chapter....are recoverable, shall the exclusive and only rights and remedies of such employee..t common law or otherwise, on account of such injury, against his or her employer." Bother parties agree that the employee's injury is covered by this statute. Will the employer prevail? Source: The Modern Law of Contracts, Frier & White, 3rd ed. pg 49.

This is a confusing issue. Both sides have good arguments. The employer could argue that there is no legal consideration because there is no eligible performance being sought by the promise. The employee's argument that him not pursuing the claim against his employee is enough consideration would struggle when couple with the idea that the worker's compensation was agreed to that very purpose (i.e., compensation if he indeed does injured, which he received, for his assent to not sue). In order words, the worker's comp had met the legal obligations that the employer had which is SEPARATE from this new promise of a "lifetime employment." Unless the ex-employee can provide a performance differentiated from the initial performance of NOT suing for negligence, he has an uphill battle. IOW, the initial claim for his injury is already satisfied 1) by the contract he signed with worker's comp 2) he received his compensation thus completing the execution of that promise for that incident.

The employee, on the other hand, could state that the promise of his performance (his relinquishing his rights) implicitly contained "full time employment" or compensation, to be more accurate. Since his injury is permanent, he has to 'permanently' relinquish his rights which means, from his perspective, he can argue that the promise also must match the permanency of his injury. Thus there is consideration implicit in the agreement.

Am i on a good track? And please let me know if this is not appropriate for this forum.

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