Pikabu Pizzeria enters into a contract with Joey\'s Waterpark under which Pikabu
ID: 358001 • Letter: P
Question
Pikabu Pizzeria enters into a contract with Joey's Waterpark under which Pikabu will be the exclusive provider of pizzas to the concession stands located at Joey's Waterpark. Two months into the contract, the state where Joey's is located places a ban on the sale of certain "unhealthy foods" at venues that cater to children. The "unhealthy foods" list includes pizza, and the "venues that cater to children" list includes waterparks. Joey's cancels all future orders of pizzas from Pikabu.
Which of the statements below best describes the likely outcome of Pikabu's lawsuit for breach of contract?
Pikabu will lose because the contract was not valid. Such exclusivity arrangements are against public policy as a restraint on trade.
Pikabu will prevail because the contract was valid (presuming there was an offer, acceptance, consideration, etc.), and Joeys is refusing to comply with its obligations to order pizza. There has been a material breach.
Pikabu will prevail because the sale of pizza at waterparks became illegal after the contract was signed -- the contract is thus valid and enforceable.
Pikabu will lose because, even though the contract was valid when signed, there has been a termination by operation of law.
a.Pikabu will lose because the contract was not valid. Such exclusivity arrangements are against public policy as a restraint on trade.
b.Pikabu will prevail because the contract was valid (presuming there was an offer, acceptance, consideration, etc.), and Joeys is refusing to comply with its obligations to order pizza. There has been a material breach.
c.Pikabu will prevail because the sale of pizza at waterparks became illegal after the contract was signed -- the contract is thus valid and enforceable.
d.Pikabu will lose because, even though the contract was valid when signed, there has been a termination by operation of law.
Explanation / Answer
The answer to this problem is D. Pikabu will lose because, even though the contract was valid when signed, there has been a termination by operation of law. Contracts contain clauses with situations like these covered under null and void, therefore unless pikabu had mentioned some clause like this or the bylaws stated otherwise, pikabu will not win their lawsuit. This is due to the fact that honey did not break the contract but the government has placed restrictions on the businesses which is counted as an unprecedented situation and unless mentioned in the contract will cause the contract to terminate.