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Contract Validity and Enforceability: Was Jabba the Hutt in the wrong?

Contract Validity and Enforceability: Was Jabba the Hutt in the wrong?

 

A long time ago in a galaxy far, far away… a less-than-reputable cargo transporter known as Han Solo had a debt to pay. Han Solo was hired by Jabba the Hutt, a less-than-reputable businessman, to transport “spices” across the galaxy, but Han Solo failed to deliver the goods. Jabba lost a considerable sum of money on this arrangement and put a hefty bounty on Han Solo’s head. Was this Jabba’s only option? Could he have enforced the terms of this agreement in the court of law? Did Han Solo even owe a debt to Jabba as a result of his failure to deliver the goods?

 

We couldn’t say for sure under the imperial laws of the Galactic Empire, or even the laws of its democratic predecessor the Galactic Republic, BUT . . . under Michigan law the answers to these questions depend on whether this arrangement constituted a valid, legally binding contract. Michigan law identifies five essential elements of a contract:

 

  1. Competency to contract – This standard evaluates an individual’s age and mental capacity to determine if they are competent to bind themselves to the legal obligations associated with entering a contract. At the time Han Solo and Jabba came to an agreement, both were presumably over the age of majority (eighteen in Michigan) and had sufficient mental capacity to understand the nature and effect of the obligations being incurred.

 

  1. Legal consideration – Consideration is any bargained-for exchange of legal detriments, however slight. Here, Han Solo bargained to provide his transportation services in exchange for Jabba’s promise to pay a fee for the service. These types of detriment are acceptable as consideration, as opposed to various types of unenforceable consideration. For example, the arrangement would have been unenforceable if Han Solo agreed to provide his services in exchange for Jabba’s love and affection, even if Han actually wanted such a thing.

 

  1. Mutuality of agreement – A valid contract requires a “meeting of the minds”, but not like the one between Luke and Leia, or between Rey and Kylo… This means the parties must mutually agree on the material terms of the contract. This is typically done through the process of offer and acceptance, but the parties could be mistaken on the meaning of a material term. For example, if Han Solo and Jabba came to an agreement without defining or mutually understanding the meaning of “spices”, Han Solo’s delivery of the incorrect material could be a defense to Jabba’s claim for breach of contract.

 

  1. Mutuality of obligation – For most contracts, this standard requires both parties to be bound to a legal obligation, or else neither party is bound. Both parties must have some duty to the other, such as Han Solo’s duty to deliver the “spices” and Jabba’s duty to pay for the service.

 

  1. Proper subject matter – A contract is not valid or enforceable if the subject matter requires a party to break the law. This would be the primary hurdle to enforcement if Jabba attempted to enforce this agreement to collect against Han Solo. Some sources indicate the “spices” transported by Han Solo may have been Glitterstim, an addictive and illicit substance. Additionally, Han Solo failed to deliver the goods because his cargo ship was inspected by Imperial customs agents, so he was forced to jettison the “spices” to avoid capture. These facts suggest the subject matter of the contract was likely illegal due to Han Solo being required to either be in possession of illegal substances or to violate Imperial customs laws. In any event, it seems the subject matter was not proper.

 

Why does the subject matter, matter? If transportation of the “spices” was an improper subject matter, it means the contract was likely void because it violated public policy. Void contracts create no legal rights or obligations, so Han Solo received the goods from Jabba, but had no legal right to be paid for them, and no legal obligation to deliver them. Similarly, Jabba had no legal right to enforce delivery of the goods, and no legal obligation to pay Han Solo for the services. If the “spices” were an illegal subject matter, the court would not and could not enforce such an agreement.

 

You will note that having the agreement in writing is NOT one of the essential elements.  The reason being that under Michigan law, except for limited statutory established circumstances (i.e., fraudulent conveyances), a contract does not have to be in writing in order to be enforceable.  These statutory established circumstances are commonly referred to as the “statute of frauds“.  As such, the fact that the agreement between Han Solo and Jabba was not in writing would not be a reason to prevent the legal enforcement of their agreement.

 

Before you make the same mistakes as Jabba, consider reaching out to HaasCaywood PC to schedule a consultation. Our attorneys can answer your questions and make sure your agreements are both legally binding and enforceable.

 

May the Fourth be with you.

 

Prepared by Tiffany Edwards

 


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