Question

On November 5, an athletic shoe manufacturer entered into a written contract with a shoe store to carry its running shoes. The contract included a provision that "5% of the proceeds attributable to the sale of the manufacturer's shoes by the shoe store during the month of February (American Heart Month) each year would be donated to the local hospital's cardiovascular wing." The day after the parties signed their contract, the store owner informed the hospital of the planned donation and indicated that the hospital could expect to receive about $1,500 in early March. In anticipation of the donation, the hospital purchased a new heart monitor on January 5. Because the Christmas sales season had been poor, on January 15 the manufacturer and the shoe store agreed to modify their contract to eliminate the provision for payments to the hospital's cardiovascular wing. When the hospital did not receive the payment in March, it discovered that the parties had modified the agreement.

If the hospital brings an action against the shoe store to recover 5% of the proceeds from the sale of the shoes, is it likely to prevail?


A Yes, because the hospital's rights vested when it learned of the original agreement.

B Yes, because the hospital detrimentally relied on the parties' agreement.

C No, because the hospital's rights had not vested when the modification was made.

D No, because the payment is a gift, and the hospital is a donee-beneficiary.

Answer 1

The hospital is not likely to prevail in bringing an action against the shoe store to recover 5% of the proceeds.

Step-by-step explanation:

No, the hospital is not likely to prevail in bringing an action against the shoe store to recover 5% of the proceeds from the sale of the shoes. The modification made to the contract between the manufacturer and the shoe store effectively eliminated the provision for payments to the hospital's cardiovascular wing. The hospital's rights had not vested at the time the modification was made, and therefore, it does not have a legally enforceable claim.