ABA - Contract Breach and Remedies rated A+

ABA - Contract Breach and Remedies rated A+You work part-time for Penny Pools, a pool cleaning service in Florida. Mike, the owner, is having a staff meeting to discuss a series of customer complaints and other issues. Using your understanding of contract law and the Materials above, help Mike find solutions to his problems. Mike: "Thanks for coming in, everyone. We have a lot to talk about this morning. Lots of customer issues to sort out. Suzanne, do you want to get us started?" Suzanne: "Sure I'm having an issue with Ms. Aspen. I cleaned her pool for 6 months under our standard agreement now she says she's going to sue so for the $3600 she already paid." Mike: "What's her problem?" Suzanne: "She's throwing a fit about the brand of chemicals I used. I used the same brand that we use in all of our pools. I don't get it." Mike: "Do you have her signed contract? Let's go through and make sure we did everything we were supposed to on our end." Suzanne: "Yeah, here it is." Pool Maintenance Agreement - Aspen This Agreement is between Penny Pools, LLC (hereinafter "Penny Pools") and Alison Aspen (hereinafter "Customer") for pool cleaning and maintenance services to be provided at: 600 Pineapple Way, West Palm Beach, FL 33401. The Parties agree that Customer has contracted with Penny Pools to perform pool and/or spa maintenance at the address specified above. Specifically, Penny Pools will perform the following services on a weekly basis: 1) Vacuum and otherwise remove debris; 2) Brush walls, steps, and slides; 3) Clean filters and screens; 4) Empty traps or skimmers; 5) Test water chemistry; 6) Apply chemicals to balance pH and sanitize, as necessary; 7) Perform visual inspection of all pumps and associated equipment. Should Customer's pool require cleaning and/or maintenance beyond what the Penny Pools technician considers to be normal maintenance, Penny Pools will bill Customer for the time required to perform such maintenance and/or cleaning at a rate of $100 per hour. A Penny Pools technician will notify Customer prior to the performing any additional services beyond the scope of normal maintenance. Penny Pools will assign a technician to Customer's property based on scheduling and availability. Penny Pools will endeavor to perform maintenance on the same day of the week at each interval to ensure consistency, but alternate service dates may be necessary based on technician availability, inclement weather, and major holidays. The Parties further agree that this is a 6-month service contract and Customer agrees to pay Penny Pools $600.00 on the last Friday of each month for services rendered plus any additional service fees incurred over the course of the monthly billing cycle. So agreed: Suzanne Smith Alison Aspen Date: January 2, 2017 Mike: "Are you sure you didn't fall short on anything else?" Suzanne: "I'm positive I was there every Wednesday, like clockwork. The pool was always spotless and working great. I did't miss a thing." Me: "That sounds like 'complete performance.' Meaning, you performed all of your contract obligations perfectly." Mike: "I agree. Suzanne met all of our contractual obligations." David: "Wait a second. I don't see how this could be complete performance when Ms. Aspen is clearly unhappy. Are you saying she couldn't sue us for breach of contract?" Me: "I don't think Ms. Aspen has a strong claim. You promised to test the water chemistry and 'apply chemicals ... as necessary." There's nothing specific about the type of chemicals. As long as you used effective chemicals and the pool was clean, I would argue that's complete performance." Mike: "Exactly! A court would look at this situation objectively - through the eyes of a 'reasonable person.' No reasonable person would think you can choose your own brand of pool chemicals." Suzanne: "So maybe we performed perfectly. But, she is really mad and sounds serious about suing. I think we should talk about how we could defend ourselves if she actually filed a claim. Do we have any other defenses?" Me: "We could assert the substantial performance defense." Mike: "Could you explain that a bit more?" Me: "Sure. Substantial performance means that you made a good faith effort to perform, any shortcoming was unintentional, and you didn't impact the value or the essential terms of the agreement." Mike: "Oh right! Meaning there wasn't a 'material' breach. So an example of a material breach would be if Suzanne cleaned Ms. Aspen's pool, but forgot to add any chemicals to keep it clean. We couldn't call that substantial performance (even if she made a good faith effort) because it would have affected the core of the agreement." Suzanne: "What does 'good faith effort' mean?" Me: "You have to be honest and make a sincere effort to perform perfectly." Mike: "That's right. We have an ethical obligation to perform under the contract with 'good faith and fair dealing.' This is a situation where we are legally obligated to act morally." Suzanne: "I really did my best. I was shocked when she was unhappy. All I did was use the same chemicals we always use. They worked great but Ms. Aspen still complained that they weren't 'top of the line.' Do you think that would count as substantial performance?" Me: "Absolutely, You acted in good faith, and at most, this was a small deviation. It didn't affect the value of the service you provided or the purpose of the contract." Mike: "I agree. Even with the different chemicals, we performed out duties under the contract and Ms. Aspen got the benefit of the bargain. Her pool was spotless. That's substantial performance... or even complete performance!" David: "So we wouldn't owe Ms. Aspen any money? Even if we only substantially performed?" Me: "Penny Pools could owe Ms. Aspen damages for any cost she suffered because of your imperfect performance. Otherwise, we would get to keep the full amount due under the contract: $3,600." Suzanne: "The chemicals I used worked great. We didn't damage the pool or the filtration equipment." Mike: "That's good news. Sounds like we get to keep the money she paid and we wouldn't owe her any damages. I think we're on solid ground with Ms. Aspen so let's set that aside for now." Mike: "David, want to tell us about Mr. Evergreen?" David: "I definitely got in over my head with Mr. Evergreen. I never went to see his house before we both singed the standard agreement. I faxed it to him. I show up to clean for the first time and it's a palace. Three pools AND a hot tub. I told Mr. Evergreen that there was no way I could clean and maintain all the pools on the property for $600 a month. I explained that I would have to charge him at hourly rate for all the extra time I'd have to spend - just like it says in the agreement." Pool Maintenance Agreement - Evergreen This Agreement is between Penny Pools, LLC (hereinafter "Penny Pools") and Ed Evergreen (hereinafter "Customer") for pool cleaning and maintenance services to be provided at: 1004 Palm Highway, West Palm Beach, FL 33401. The Parties agree that Customer has contracted with Penny Pools to perform pool and/or spa maintenance at the address specified above. Specifically, Penny Pools will perform the following services on a weekly basis: 1) Vacuum and otherwise remove debris; 2) Brush walls, steps, and slides; 3) Clean filters and screens; 4) Empty traps or skimmers; 5) Test water chemistry; 6) Apply chemicals to balance pH and sanitize, as necessary; 7) Perform visual inspection of all pumps and associated equipment. Should Customer's pool require cleaning and/or maintenance beyond what the Penny Pools technician considers to be normal maintenance, Penny Pools will bill Customer for the time required to perform such maintenance and/or cleaning at a rate of $100 per hour. A Penny Pools technician will notify Customer prior to the performing any additional services beyond the scope of normal maintenance. Penny Pools will assign a technician to Customer's property based on scheduling and availability. Penny Pools will endeavor to perform maintenance on the same day of the week at each interval to ensure consistency, but alternate service dates may be necessary based on technician availability, inclement weather, and major holidays. The Parties further agree that this is a 6-month service contract and Customer agrees to pay Penny Pools $600.00 on the last Friday of each month for services rendered plus any additional service fees incurred over the course of the monthly billing cycle. So agreed: David Day Ed Evergreen Date: May 5, 2017 David: "With the extra time, his first month's bill was $2,400. He was not happy," Mike: "Did he pay us yet?" David: "No. I sent him the bill but payment isn't due until Friday. If anything, I even under billed him for my time. We're definitely going to lose money under this contract. I can't do this job by myself and keep up with out other customers." Mike: "Do you think Mr. Evergreen could sue us for breach of contract?" Me: Mr. Evergreen has no claim for breach of contract because he has not paid his bill. He has not fulfilled his end of the bargain and doesn't have "clean hands." THIS ANSWER IS INCORRECT! Mike: "The "clean hands doctrine might come into play if we were suing Mr. Evergreen for breach of contract. We would have to show that we weren't at fault and didn't cause the breach. But I don't think that applies here. And his payment isn't even due yet." David: "We just talked on the phone and he doesn't want to sue us. He want to come up with a compromise." Mike: "What's our best option to get out of this contract right now so we don't have to do any more work for this client? Of course, I still want to get paid for the work David already did. I'm also concerned about the vague language in our standard agreement. What do you call it when you replace the original agreement with a new agreement?" Me: "Substituted agreement or modification." Mike: "That's it! We should agree to a new contract or new terms. That would immediately discharge all of us from any obligation under the original contract. David, can you see if Mr. Evergreen would be willing to pay us $!,500 for the work we already did then terminate service going forward? I think that would be a good compromise." David: "Yeah, for sure. I'll call this afternoon and see what he says." Mike: "Moving on. Last, but not least, Melissa! What problem do you have for us??"