American Contract Law for a Global Age, 2017a

Problems
Problem 20.1
Scheck owns a Burger Queen fast food restaurant franchise in the middle of
Smallville (pop. 5,943). The franchise is held under a highly detailed 45-page called
the “Franchise Agreement.” One term of the Agreement gives Scheck the right to
operate a BQ franchise restaurant at the corner of Main and Elm in Smallville. The
Agreement specifically goes on to provide, however, that “nothing contained herein
shall be read to grant or imply that [Scheck] shall have any area, market, or
territorial rights in such geographic area.”
Scheck has learned that BQ has just negotiated an agreement with Marryat
Corp., a major national food-services company, to build a brand-new Burger Queen
franchise right at the point where Main Street meets the Interstate, only a few blocks
from Scheck’s store. Some Burger Queen employees tell Scheck that the company is
hoping that Marryat ultimately acquire a substantial number of its outlets and that
it will help the company get rid of older stores owned by small-town business people
and increase the professionalism of the ultimate product.
When the sparkling new building opens in its prime location, it quickly picks
up a huge share of the market. Scheck’s business plummets. The relatively few
customers he gets, in fact, tell him that they came to his store because the lines at
the one on the Interstate were too long. He sues, arguing that Burger Queen opened
the new store knowing that it would drive him out of business, and thus violated its
obligation of good faith. BQ points to the explicit language of the Agreement. What
should each side argue, and who has the better argument?
Problem 20.2
Plumber is called to the residence of Homeowner, where moisture has been
seeping into a ceiling. After examination, Plumber says that in her view, the problem
likely lies in the pipes installed in the ceiling, and “you really ought to fix the pipes.
I think that’s probably what’s going on.” She offers to replace the pipes for $800,
nearly all of which will go to her labor in cutting through the floor of the room above,
replacing a few pipe joints, closing things back up, and putting the carpet back down.
Because Homeowner is leaving for a 3-week vacation in Europe, he agrees to have
the work done then and there. Plumber thereupon does the work, which takes several
hours of her time. She replaces exactly what she said she would replace and returns
everything neatly to the way it was. Homeowner pays her, and happily heads off on
vacation.
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UNIT 20: IMPLIED TERMS 421