Question

Carl has a construction business. Last week he visited Hugh to give a quote for a one-room addition to Hugh's house. Hugh wants the addition completed for 10,000 by the end of August. Hugh said that he would provide the materials and asked Carl to provide the labor. Carl said, 'Sure, I can do it for10,000 .' Hugh replied, 'Great. When can you start?' 'Mid-July.' 'And you'll still finish by the end of August? My daughter's getting married then, and we'll need the room.' 'Oh, yeah. No problem,' Carl said. 'Okay,' Hugh said. 'Okay,' Carl said. No money-or anything else-has changed hands. Carl has been offered a large and lucrative job that will require all summer and that would preclude him from doing Hugh's job during that time. He asks you whether he can take that job. Can Carl take the new job?

1) Yes, because there is no consideration yet for his arrangement with Hugh.
2) Yes, because Carl and Hugh have not even reached the stage of offer and acceptance.
3) Yes. Although Carl and Hugh have entered into a contract, its enforcement is barred by the statute of frauds.
4) No, because Carl is already bound by a contract to Hugh.

Answer 1

Carl appears to be bound by an oral contract with Hugh for the room addition by the end of August. Despite no exchange of money, the clear offer and acceptance indicate an enforceable agreement.

Step-by-step explanation:

The inquiry revolves around whether Carl is already bound by a contract to Hugh and if he can take a new job instead of the one agreed upon with Hugh. After their conversation in which Carl agrees to finish Hugh's room addition before the end of August for $10,000 and nothing has been exchanged, it seems there is an oral contract formed. On this basis, choice four would be correct; Carl is already bound by a contract to Hugh. It is not a matter of the stage of offer and acceptance; a clear offer and acceptance have been communicated, meaning that the arrangement between Carl and Hugh constitutes an enforceable agreement despite the lack of written contract or money exchange.

Nonetheless, Carl should be aware that, under the Statute of Frauds, certain contracts need to be in writing to be enforceable, including those for services not to be performed within a year and contracts related to real estate. Considering that Carl's agreement with Hugh involves real estate improvements and it has been verbally established, there is a potential for the agreement to fall under the Statute of Frauds, which could affect enforceability. Nevertheless, in most jurisdictions, performance under a verbal contract which has begun lends credibility to its enforceability—thus Carl has a legal and ethical obligation to honor their agreement or face potential legal consequences