Question

INSTRUCTIONS

In the memorandum to your superior, Mr. Walter, tell him in your opening sentence why you are writing this memo and state your main point(s).

Then, in separately numbered paragraphs, discuss and explain the issues and the legal reasons as to:

(1) whether the original contract terms are enforceable against Ms. Lowe and

(2) from the perspective of the Firm, consider the circumstances if she sends the $5000 and the Firm opts to accept or not to accept that payment, and then

(3) explain in a separate paragraph what this means to your Firm on a practical level.

Consider what policy you should draft/set for the Firm, so that similar/identical issues can be handled in the future without the need to involve the Legal Department

THE JAY LOWE CASE – WHAT HAPPENED

Your superior informs you that the former client, Ms. Jay Lowe, entered a written and signed contract with the Firm in Manhattan on January 1, 2022 under which Ms. Lowe agreed to pay the Firm $10,000 in fees for consulting services. The consulting services that Ms. Lowe contracted for were completed exactly two months later, on March 1, 2022.

Nevertheless, on January 15, 2023, Ms. Lowe informed the Firm that, in her opinion, the Firm’s consultant mishandled her case and did not do a good job because she did not get significant international business. Ms. Lowe further explained that she expected the international business to be generated, because of the Firm’s consulting interventions, to jump to 25% of her total revenue. Instead, the international business constituted a meager 3% of her revenue.

As a result, she does not feel that she should pay the Firm the $10,000 per the January 1, 2022 contract terms. She has been calling the office to argue about this matter for the past three weeks. Now, she claims that she is willing to send a check for $5000 (the amount that she thinks the services were worth) as full and final payment for the consulting services.

Answer 1

In light of Ms. Jay Lowe's dissatisfaction with the consulting services and her proposal to pay $5000 as full and final payment, the original contract terms may be legally enforceable. However, it is crucial for the Firm to assess the potential legal and practical implications before deciding whether to accept or reject the $5000 payment. Establishing a clear policy for handling similar situations in the future is advisable to streamline the resolution process without the immediate involvement of the Legal Department.

Step-by-step explanation:

The primary issue revolves around the enforceability of the original contract terms against Ms. Lowe. According to the information provided, the consulting services were completed as agreed upon in the contract. Ms. Lowe's dissatisfaction with the results does not necessarily void the contract. Legal reasoning may support the Firm's position in seeking the full $10,000 payment based on the completed services outlined in the contract.

Moving forward, the Firm needs to carefully consider the implications of Ms. Lowe's offer to pay $5000 as full and final payment. Accepting this amount might be perceived as a compromise, potentially waiving the right to claim the full contracted fee. On the other hand, rejecting the payment could lead to legal disputes. The Firm must weigh the risks and benefits of both options.

To address similar issues in the future, it is advisable for the Firm to draft a clear policy outlining the steps to be taken in cases of client dissatisfaction and proposed partial payments. This policy should consider legal perspectives, potential financial impacts, and the firm's overall client relationship strategy. Such a policy can provide a standardized approach, minimizing the need for immediate legal intervention and ensuring consistent handling of similar situations.