Legal Question in Business Law in California

Re: Is a phone call agreement a binding contract?

Verbal contracts can be formed over the phone as easily as in person, but you have not given enough facts to determine whether a contract was formed here. If you made what would legally be considered an offer (you describe it as merely an inquiry, which is not the same thing) and she accepted before your offer either expired or was withdrawn, then you had a contract.

If you do have a contract and you breach it, her damages would most likely be limited to any difference between your agreed price and the price she later gets, plus any additional costs she incurs along the way. So if you had a contract to pay $10,000 for the the tanning beds and she sells them two months from now for $8,000 after spending, say, $400 for two more months of storage and $500 for additional advertising, the damages would be $2,900, plus two month's interest on $10,000.

If you made the agreement knowing that a breach would cause her some additional monetery damages, then you would be responsible for those as well. For example, if you knew she was going to buy more inventory to put in the same space after you took away the tanning beds, you would have to pay for reasonable costs of storing and moving the new inventory in addition to the damages I described above.

Her claim for mental anguish is absurd, unless there is a lot more to this story than you have indicated. Emotional distress damages are simply not available in breach of contract cases. (In some states there may be an exception to this rule where an insurance company wilfully mistreats a policyholder, but otherwise this is a universal rule.)

Re: Is a phone call agreement a binding contract?

I am sure your phone call was less than one sentence. You picture this as an inquiry and she deems it an offer. He said she said. A verbal agreement can be entered into between two people which is as binding as a written agreement. If though she sues you for breach of contract mental anguish is not something that she can likewise include inner claim for damages. On the other hand if she sues you for some form of negligence then mental anguish is permissible. In this situation I would ask for the name of her attorney and have your attorney, yes you heard me say your attorney contactors to make sure that everybody understands the other's position. No offer, no contract. If you really don't want tanning bed then personally you shouldn't call them in the first place. If you do want them you can still negotiate deal.i have been practicing law in this speciality for over 30 years in the san francisco bay area and if you wish to consult with me you can contact me at 925-945-6000

Re: Is a phone call agreement a binding contract?

I agree with Mr. Hoffman. "Mental anguish" damages cannot be awarded for breach of contract.

Also, whether your phone discussions resulted in a binding oral contract is very doubtful. An offer (which when accepted becomes a contract) and an inquiry (which is merely preliminary discussion that cannot be "accepted") are best distinguished by this common-sense test: Would an ordinary business person, overhearing the conversation, conclude that the person making the alleged offer intended to be bound if the other party to the conversation said, "I accept?"

A final observation is that there is a "statute of frauds" for contracts for the sale of goods. This law, part of the California Commercial Code, requires contracts for the sale of goods with a value in excess of $500 to be reflected by a writing signed by the person to be sued before suit can be maintained. The "writing" is usually a written contract or purchase order, but can be just a simple memo by the buyer confirming his order. If you signed nothing, your liability is doubtful if the price was to be $500 or more. Commercial Code, section 2201(1). There are exceptions; see sections 2201(2) through (4).

Re: Is a phone call agreement a binding contract?

If you made an offer it is binding. If you did not, no.