Cengage Advantage Books: Fundamentals of Business Law 9th Edition by Roger LeRoy Miller

Exercise 14

Case Problem with Sample Answer Evelyn Kowalchuk, an eighty-eight-year-old widow, and her son, Peter, put their savings into accounts managed by Matthew Stroup. Later, they initiated an arbitration proceeding before the National Association of Securities Dealers (NASD), asserting that Stroup fraudulently or negligently handled their accounts. They asked for an award of $832,000. After the hearing, but before a decision was rendered, Stroup offered to pay the Kowalchuks $285,000, and they e-mailed their acceptance. Stroup signed a settlement agreement and faxed it to the Kowalchuks for their signatures. Meanwhile, the NASD issued an award in the Kowalchuks' favor for $88,788. Stroup immediately told them that he was withdrawing his settlement "offer." When Stroup did not pay according to its terms, the Kowalchuks filed a suit in a New York state court against him for breach of contract. Did these parties have a contract? Why or why not? [ Kowalchuk v. Stroup, 873 N.Y.S.2d 43 (N.Y.A.D. 1 Dept. 2009)]