Contracts

Fact Pattern

Lobbyist recently realized that her calendar entries, meeting agendas, meeting notes, client files, and other documents were all on paper, maintained in an old-fashioned filing system using cabinets and so forth. This meant that, if casualty were to befall her office, the records might be destroyed. To avert this disaster, Lobbyist decided to hire someone to scan and digitize her paper records into a coherent electronic filing system. To that end, after extensive research, she met with Scanner on May 1. Scanner told Lobbyist that he had considerable experience creating electronic filing systems. He claimed that the system he would create for Lobbyist would not only hold all her digitized paper records, but also organize those and all other electronic records into an efficient structure, making it much easier for her to find things. Finally, Scanner told Lobbyist that he had worked with other clients to integrate existing electronic records, such as emails, into the file structures he created for the scanned documents.

Lobbyist subsequently hired Scanner under the following valid and binding contract:

Scanner will digitize all of Lobbyist’s calendar entries, meeting agendas, and other records and correspondence. Scanner will organize the digitized items into an electronic filing system. After doing so, Scanner is responsible for disposing of the paper records at a recycling facility. In exchange, Lobbyist will pay Scanner $25 per hour. Should either party breach any part of this contract, the breaching party will pay the nonbreaching party $5,000. This is the complete and final agreement between Scanner and Lobbyist, and it supersedes any previous understandings and agreements, written or oral.

The following Monday, Scanner arrived at Lobbyist’s office to begin work. Before Scanner could begin, Lobbyist stopped him. She stated that for security reasons, she wanted Scanner to shred the paper documents, rather than recycling them. Scanner said that he could do so, but it would require renting an industrial shredder. He would thus need to be paid $30 per hour instead of $25, to cover the extra cost. Lobbyist agreed, and Scanner started work.

Three weeks later, Scanner sent Lobbyist a final report. The report outlined the file structure Scanner created for Lobbyist’s records, explained how to access the files, and included a final bill of $3,600 for 120 hours of work. Scanner did not, however, integrate the emails into the filing structure, nor did he scan and digitize the meeting notes. Furious, Lobbyist sent a check for only $3,000, explaining that the contract required that she pay only $25 per hour. Lobbyist also sued Scanner for breach of contract, citing Scanner’s failure to integrate the emails into the filing structure or to digitize the meeting notes. Scanner countersued for breach of contract, claiming to be due an additional $600 under the oral modification to the contract.

According to Lobbyist, in the May 1 meeting, Scanner claimed that he had previously integrated emails into the file structures he created for digitized paper documents, and he agreed to do the same for Lobbyist. Lobbyist also said that she believed her handwritten meeting notes would be scanned and archived, as part of the “other records” referenced in the contract. This was based, in part, on past file structures that Scanner showed her. These structures included such notes in “Meeting Records” files. Scanner argued that he never discussed handwritten meeting notes with Lobbyist, and would typically not digitize them. Finally, Lobbyist argued that even if she did agree to pay Scanner $30 per hour, the written contract controls, so she should have to pay him only $25 per hour.

Questions

1. Assuming that Lobbyist’s recollection is correct as to what Scanner said and did at the May 1 meeting, would a court consider evidence supporting Lobbyist’s claim that Scanner has breached the contract, in that he did not integrate the emails into the filing structure? Explain.

2. Will a court consider evidence concerning whether Scanner digitized handwritten meeting notes in work for previous clients? Explain.
   

3. Assuming that Scanner can prove that Lobbyist did orally agree to the higher rate of $30 per hour in exchange for shredding the paper documents, will he have an opportunity to present evidence in court supporting that argument? Explain.
   

4. Assume that the court finds, rightly or wrongly, that Scanner breached the contract, in that he failed to digitize Lobbyist’s handwritten meeting notes, but the court finds no other breaches by either party. Will the court enforce the provision stating that a breaching party must pay the nonbreaching party $5,000? Explain, not discussing any alternative theories of damages.