Business Law 12th Edition by Roger LeRoy Miller ,Frank Cross

Exercise 10

Oral Contracts Jason Knapp, doing business as Knapp Associates, hired Barbara Meade as an independent contractor in March 2009. The parties orally agreed on the terms of employment, including payment to Meade of a share of the company's income, but they did not put anything in writing. In March 2011, Meade quit. Knapp then told Meade that she was entitled to $9,602.17-25 percent of the difference between the accounts receivable and the accounts payable as of Meade's last day. Meade disagreed and demanded more than $63,500-25 percent of the revenue from all invoices, less the cost of materials and outside processing, for each of the years that she worked for Knapp. Knapp refused. Meade filed a lawsuit in a state court against Knapp, alleging breach of contract. In Knapp's response and at the trial, he testified that the parties had an oral contract under which Meade was entitled to 25 percent of the difference between accounts receivable and payable as of the date of Meade's termination. Did the parties have an enforceable contract? How should the court rule, and why?