1. Legal Cognizance
2. Briefly describe the facts.
DiLorenzo was employed by Valve & Primer Corporation, and claims that the corporation offered him a ten-year stock option in 1987. DiLorenzo further claims that he stayed with the company for an additional nine years in reliance of that employment agreement. Valve & Primer claim no agreement was made in regards to a stock purchase option. In 1996, DiLorenzo attempted to “tender his remaining one hundred shares pursuant to a stock redemption agreement” as he entered into a semi-retirement. He was fired shortly after, so he claims that the stock agreement should be enforced by (1) validity, and if not valid then by (2) promissory estoppel.
Which facts were key to the outcome?
DiLorenzo claims reliance on stock option to continue employment. The only purported proof of such an agreement is an “unsigned copy of board meeting minutes of which DiLorenzo had the only copy. No mandatory requirement of staying employed by the company to make the election to purchase the stock at the option price.
2. Legal issue:
3. What legal issue(s) does this case illustrate (i.e. why is this case in the chapter)?
Past consideration and promissory estoppel.
1. What are all of the elements of the main legal rule that this case illustrates? For instance, if the case is about undue influence, list ALL of the elements that the court in this case said had to be proven by the plaintiff.
Past consideration: no valid consideration if promise is for an act already done. Promissory estoppel makes a noncontractual promise enforceable when there was detrimental reliance on the promise.
Repeat 2. for each issue raised. (For example, a case may discuss 1. Whether there is an implied-in-fact contract, and II. Whether the UCC or common law applied. If so, you will repeat 2. for each of these two issues.)
1. Expand Perspective, Gain Interpersonal Understanding, and Critically Assess Implications
2. Prevailing party’s point of view:
3. What legal arguments were made by the prevailing party?
Valve & Primer argued that there is no consideration that would make the stock agreement valid and that DiLorenzo could not prove detrimental reliance that would create grounds for promissory estoppel.
1. What facts, legal reasoning, social policy, and ethical principles would support a ruling for the prevailing party?
No legal detriment to DiLorenzo validating consideration and promissory estoppel requirements were not met.
1. What were the probable motivations behind the prevailing party’s actions leading up to the dispute? After the dispute?
Valve & Primer did not believe they needed to uphold the stock option agreement because they had no documentation of such a promise and they did not feel DiLorenzo had adequate reasoning for upholding the agreement.
Repeat 3. for each and every issue in the case.
4. Losing party’s point of view:
5. What legal arguments were made by the losing party?
DiLorenzo argued that because he relied on the promise of stock options he deserved that the option be enforced.
1. What facts, legal reasoning, social policy, and ethical principles would support a ruling for the losing party?
DiLorenzo claimed promissory estoppel on the grounds that he relied on the stock option to stay with the company
1. What were the probable motivations behind the losing party’s actions leading up to the dispute? After the dispute?
DiLorenzo claims to be held back from greater career opportunities because he relied on the company’s promise of a stock option agreement if he stayed with the company.
Repeat 4. for each and every issue in the case.
5. Judge’s point of view:
6. How did the court rule on each argument?
The appellate court ruled in agreement with the trial court in that no consideration was present and requirements of promissory estoppel were not met.
1. What facts, legal reasoning, social policy, and ethical principles did the court use to support its ruling?
Validity of consideration to make a promise enforceable and the requirement of justifiable reliance on a promise for promissory estoppel.
1. What were the probable motivations behind the judge’s decision?
Based on the above facts and reasoning, no matters present justified enforcing the promise made to DiLorenzo.
Repeat 5. for each ruling made by the judge.
1. Find Recent Developments and Diverse Theories, Synthesize, and Compare
6. Different Rules: Pose the question “What if the court adopted a different legal rule?”
1. Search the web for other articles to refer to in your article or call an attorney or business professional who may have experience with this type of issue. Write a brief one-paragraph summary of this case or article:
Drennan v. Star Paving Co. involves a subcontractor bid of $7,100 submitted by Star Paving to Drennan for construction of a public school. Drennan used Star Paving’s bid in preparation of his final bid to gain the contract for the construction. Star Paving then said that they underestimated the costs and would not do the work for anything less than $15,000. Drennan then hired a new subcontractor that completed the work for $11,000. Drennan sued Star Paving for the difference between the original bid of $7,100 and the amount of $11,000 paid to the new subcontractor on the grounds of promissory estoppel. The courts ruled in favor of Drennan because all requirements for promissory estoppel were met.
1. Ponder and reflect to compare this case to recent news and cases. This is the really cool part. You will be thinking like a legally astute manager, owner, or professional as you read, analyze and compare cases to draw your conclusions. Some neat ideas to help with your analysis: If the outcomes of the recent cases you found are different, can you make sense of the different outcomes? Are there different legal standards that make for different outcomes? Is there a trend leaning more in favor of a plaintiff or defendant’s position? Are the outcomes the same or different simply because the facts are similar or dissimilar? What accounts for the same or different results? Write your thoughts here:
I found many cases relating to the issue of promissory estoppel and how the courts were trying to rule when this issue was involved. The ruling for these cases seem to involve first looking at whether there is consideration that would make promissory estoppel an invalid argument. Such is the case in both DiLorenzo v. Valve & Primer Corporation and Drennan v. Star Paving Co. In both of these cases, there was found to be no consideration that would make for an enforceable contract. The courts then look at whether the requirements for promissory estoppel are met. These requirements include having a clear and definite offer, a reliance on the offer made, and only being able to avoid injustice if the promise is made enforceable. In regards to how courts will tend to treat this issue, on the Drennan v. Star Paving Co. a mention was made that this case has been influential in determining the approach to applying promissory estoppel in similar cases.
1. Creative, Application and Critical Thinking Questions
2. Your point of view of the case in the book:
3. Do you agree or disagree with the actual outcome? Why or why not?
I agree based strictly on the facts presented that DiLorenzo could not confirm the level of his reliance on the agreement made and the fact that the only documentation of the agreement was held unsigned by DiLorenzo. But I do feel like if DiLorenzo, in his understanding of the agreement, stayed with the company for the reason of exercising the stock options, he should be given some type of compensation.
1. Change it up: Pose the question “What if the facts were different?” Create changes to the facts that would probably result in a different outcome of the case and, using critical thinking and legal reasoning, tell why your change in facts would make a difference.
If there was a signed contract between DiLorenzo and Valve & Primer Corporation stating that he would have the right to exercise the stock option in 10 years and if still employed by the company, then the promise of the stocks should be enforced upon promissory estoppel because he stayed with the company knowing the documented requirement of continued employment.
1. Relate the case to your own experience, if applicable, or to the experience someone else has shared with you.
The Lawrenceburg Golf and Country Club general manager claims he received a promise of lifetime membership upon entering into the GM position, but the current board has no documentation of such a promise being made. Now that this GM no longer is employed by the club, he is trying to have his promise for lifetime membership enforced. The current board is not willing to honor this claim based on the fact that no documentation has been found to prove this employment benefit.
1. How will you apply the lessons from this case to your future career?
Make sure to understand completely employment agreements and options available.
1. Write recommendations to avoid future legal problems and that best suit the objectives of a firm or company in your chosen career field.
Maintain complete documentation of board meeting minutes and all employment contracts for which a future option will be related to.