Anderson's Business Law and the Legal Environment 22th Edition by David Twomey,Marianne Jennings

Exercise 4

Charles Sanarwari retained Stan Gissel to prepare his income tax return for the year 2006. The parties agreed on a fee of $400. Charles had done a rough estimate based on last year's return and believed he would owe the IRS approximately $2,000. When Stan's work was completed, it turned out that Charles would receive a $2,321 tax refund. Stan explained how certain legitimate advantages were used to reduce Charles's tax obligation. Charles paid for Stan's services and was so pleased with the work that he promised to pay Stan an additional $400 for the excellent job on the tax return when he received his tax refund. Thereafter, Stan and Charles had a falling out over a golf tournament where Charles was late for his tee time and Stan started without him, causing Charles to lose an opportunity to win the club championship. Stan was not paid the $400 promised for doing an excellent job on the tax return, and he sued Charles as a matter of principle. Decide.