Contract Law Case Contract Hypo No. 3

Mary signed a two-year contract to provide housekeeping services for Florence. The employment contract is compliant with all of the minimum standards set out in the Employment Standards Act.

After working for Florence for two months, Mary learns of the wages that others in her position are earning in British Columbia. She bides her time before approaching Florence about this. Then, on the Friday morning before a weekend during which Florence is having an important dinner party for her husbands business partners, Mary confronts Florence with the fact that she is underpaid. Mary also states that, unless her wages are increased immediately, she will be quitting on the spot--despite the fact that the dinner party cannot go ahead without her. Florence becomes frantic because housekeepers are in short supply and she also knows that it is too late to secure a replacement chef for that weekends occasion. As a consequence, she irritably agrees to Marys demands and says that she will increase her wages by 25 per cent. In order to do this, however, Florence tells Mary that her current employment contract is now invalid and that she must sign a temporary contract to provide catering services only for the dinner party that weekend, and that she will be paid the 25 per cent higher rate in this temporary contract. Florence was comfortable drafting the terms of this temporary contract which stated that Mary would be responsible for catering a dinner for 20 guests on the following Sunday (of that weekend) and that Florence would pay her for the costs of all the ingredients plus her new hourly rate of $40 per hour, which was adjusted for a 25 per cent increase.

After Mary agreed to the terms and signed the temporary contract to provide catering services that weekend, Florence stated that she wanted her lawyers to draft a new permanent employment contract after the weekend and that she would have it ready by the following Monday.

On the Saturday, a day before the dinner party, Mary spends all day preparing the food. On Saturday evening, she is ready to deliver the food to Florences mansion but Mary is unable to leave her house owing to a major storm that knocked out all of the towns electricity. On Sunday, the morning of the event, there was still no power anywhere and hurricane-like winds, along with pelting hail, prevented anyone from going anywhere. In fact, there was a news advisory telling people to stay at home.

Neither Mary nor the dinner guests made it to Florences place that Sunday evening. On Monday, when Mary showed up for work, Florence told her that she was a terrible person for blackmailing her the way she did the weekend before an important event and that Mary was fired.

Explain, using the principles of contract law, the position of each of the parties involved in this scenario.