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The Labor & Employment Report

Singing the Contract Blues

Posted in Contracts

Sometimes court decisions read like blues songs.  Such is the case with Dolan v. McQuaid

Effie Dolan and Christopher McQuaid met in 1997 and fell in love.  Eventually they were engaged to be wed.  It is unclear whether Chris bought Effie a diamond ring.  They did, however, acquire a Diamond Car Wash and Effie worked with Chris to build this business venture for three long years.  Effie wrote a business plan, drew up contracts, devised a logo; she even created a website.  She was sure she would be the future Mrs. McQuaid and benefit from the fruits of this Diamond. 

Well, being a blues song, you know what happened.  Effie’s man done her wrong.  Chris did not follow through on the wedding plan or the business venture.  He refused to share the profits of Diamond Car Wash with Effie or to compensate her for her efforts.  She sued, claiming that Chris made an enforceable promise to her (for the benefits of the car wash, not the marriage). The trial judge ruled against Effie and threw out her case. She appealed. 

The Court of Appeals ruled that Effie had no enforceable contract – oral or written.  Effie worked for an indefinite thing called love – the terms of the business plan at Diamond were not clear and defined.  She bargained for marriage not dollars.  And a contract must be a clear, bargained-for exchange. The Court also ruled promissory estoppel – the legal theory that can provide a recovery in the absence of a contract based on a definite promise – was equally unavailable to Effie.  Again, there was no definite promise in Diamond Car (and the definite promise – marriage – was unenforceable).

But, “not so fast” said the Court.  The tort of unjust enrichment permits a party to recover for the value of a benefit that was conferred upon another, retained, and by right should be repaid.   Unjust enrichment arises from actions, and the measure of recovery is to disgorge the defendant from the value of the benefit that was conferred upon him which should, says the law, leave him no better or worse off than he otherwise should be.  So the case was remanded.  Effie may now argue to a jury her value to Diamond Car Wash – and Chris.

So, how would this blues song go?   I’ll call it “The Tale of Diamond Car Wash (or Don’t Mess With a Smart Gal)”

Chris McQuaid, Chris McQuaid, he done his Effie Wrong.

Chris McQuiad, Chris McQuaid, he done his Effie Wrong.

Bought a Diamond Car Wash. Made Effie work all day long.

 

Effie Dolan was a smart gal, she made that Diamond Shine.

Wrote a bunch of contracts. She raised the bottom line.

But book smarts don’t mean nothing, when you been two timed.

 

Effie sued for justice; she sued to make Chris pay.

Trial judge said “no contract.”  Told Effie, “go away.”

Effie wouldn’t take it. She had to have her day.

 

High Court rescued Effie, Told Chris, “She has a case”

“What you took from Effie, she asks that you replace.”

Diamond ring may be the answer, to make this go away.

 

The moral of the story: don’t mess with a smart gal.

She’ll chase you ‘til she gets you; you may end up in jail.

So watch out what you promise, ‘cause Effie will not fail.