The case under consideration is concerned with an incident that occurred at the World Wide Auction House. Candie Cardigan decided to auction her giraffe print dress that was used in a movie filmed in South Africa. Cassie Cardigan was assigned to conduct the auction. Pearl and Jade were bidders competing for the dress. Pearl made the final bid of $8,500, and Cassie approved of this bid by smiling and nodding at Pearl. However, when Pearl approached Cassie with $8,500, Cassie refused to sell the dress, saying that Jade offered a larger sum after Pearl’s bid had been accepted. In reality, Jade did not do it, and Cassie refused to sell the dress to Pearl because Candie asked her to do so. As a result, Pearl intends to sue for breach of contract. Further, it will be discussed whether the breach of contract took place and whether Pearl is eligible to seek specific performance.
The details of the case indicate that there was a contract between Pearl on the one side and Candie and Cassie on the other side. The parties were involved in an auction, which is a procedure resulting in a legally binding contract once the auctioneer accepts the bid (Stimmel, Stimmel & Roeser, n.d.). An auction involves three parties: the seller, the auctioneer who is a seller’s agent in case the seller does not sell himself, and several buyers, called bidders. In the presented case, Candie is the seller, Cassie is the auctioneer, and Jade and Pearl are bidders. According to Stimmel, Stimmel & Roeser (n.d.), “once a bid is accepted, the seller has no right to accept a higher bid, nor can a buyer withdraw the buyer’s bid” (para. 9).
In this case, Cassie accepted Pearl’s bid by smiling and nodding, and since no further bids followed, a contract emerged between Cassie and Pearl. According to this contract, Cassie was obliged to sell the dress to Pearl, and Pearl had to pay the required sum for it. The contract also emerged between Peal and the auction house. The auction house in this case was the principal, and Cassie was the agent. According to Miller (2015), the principle has legal liability regardless of whether the principal is disclosed or undisclosed.
Pearl accomplished her part of the deal, but Cassie breached the contract. Therefore, Pearl is the plaintiff, and Cassie is the defendant. Since the contract has been breached, Pearl is now eligible for remedy. There are two main types of remedies available to the non-breaching party: remedies at law, i.e., monetary damages, and remedies in equity, including rescission and restitution, specific performance, and reformation (Miller, 2015). In this case, remedies at law are inadequate remedies, and Pearl can seek the remedy of specific performance. Specific performance obliges the breaching party to perform the acts specified in the contract, and it is granted if the goods at stake are unique (Miller, 2015). The giraffe print dress, which is the object of the contract, is a unique item because it is the dress used in a movie, and no other such dress exists in the world. Therefore, monetary damages will not be enough to compensate for the breach of contract. As a result, Pearl has the right to seek the remedy of specific performance.
One important condition for specific performance to be enforceable is the mutuality of remedy. It means that both parties to the contract should be able to obtain the remedy of specific performance. In the case of auctions, both the buyer and the seller can get specific performance (Stimmel, Stimmel & Roeser, n.d.). For example, the seller can obtain specific performance if the buyer fails to pay on time (Stimmel, Stimmel & Roeser, n.d.). The buyer, on the other hand, can get specific performance if the seller does not accept the bid if the auction was without reserve or has no right to refuse to sell goods after the acceptance of the bid (Stimmel, Stimmel & Roeser, n.d.). In the reviewed case, it is not clear whether the auction is with or without reserve. Generally, if the auction is with a reserve and the seller wants to have the right to withdraw the goods after the bid is accepted, the seller should notify the buyers about this condition (Miller, 2015). Since Cassie did not make such a notification, she had to sell the dress to Pearl after the bid was accepted.
There are two defenses to breach of contract that can be used by defendants in this case. First, Cassie may argue that specific performance can cause severe hardship to her. The second defense available to Cassie is the innocent third-party buyer. To use this defense, Cassie should prove that Jade offered more than Pearl, thus becoming the highest bidder, and Cassie sold her the dress. She also should argue that Jade did not know about Candie’s instructions to Cassie, which would mean that Jade bought the dress by an honest contract. If a person purchases goods by an honest contract from a seller who has no right to sell these goods, these goods cannot be withdrawn from this person (“Good Faith,” n.d.). Thus, the dress could not be withdrawn from Jade, and Pearl would not get a specific performance.
In conclusion, the contract exists between Pearl and the auction house and Cassie because an auction result in a legally binding contract. The suit should be brought to Cassie and the auction house because they both entered into the contract with Pearl, Cassie as the agent, and the auction house as the principal. Pearl is now eligible to receive the remedy of specific performance because the item at stake is unique, and monetary damages will not be enough for compensation. As a defense, Cassie may argue that a specific performance will cause severe hardship to her.
Good faith. (n.d.). Web.
Miller, R. L. (2015). Fundamentals of business law today: Summarized cases (10th ed.). Cengage Learning.
Stimmel, Stimmel & Roeser. (n.d.). The law of auctions. Stimmel Law. Web.