University of California Riverside Pool Construction with Tom Cruise Case Analysis

Pool Construction with Tom Cruise

Fact Pattern

Tom Cruise likes to swim.  So much in fact that he has hired Mimi Rodgers, a world famous pool contractor, to build for him a new pool in his backyard.  In fact, Tom Cruise is focused on teaching is daughter Suri how to swim and wants her very first lesson to be on her upcoming birthday.  In fact, in writing the pool construction contract, Tom Cruise writes into the contract an express acknowledgement that Mimi Rodgers must, as a material term of the agreement, complete the pool construction in 60 days so that Suri can have her first lesson on her birthday in that very pool you are about to build.  Mimi Rodgers doesn’t see this being a problem as Tom Cruise’s house is on a flat plain without any signs of geological hazards of impediments that will prevent her from completing the construction project within 45 days.  The contract is for $1 million leaving her with a healthy profit margin.

In fact, Mimi Rodgers is so determined to complete the project well in advance of Suri’s birthday so she starts construction right away – she even brings in your crew and have them start digging the very next day.  The pool is an Olympic size pool and will take up a good amount of space, and in fact will take up most of the yard, still this should not present a problem for Mimi Rodgers.

About three feet down, the construction crew runs into some trouble.  It turns out that underneath the Cruise property is a large slab of granite that a local geologist says is 30 feet deep and four city block wide.  It will take you two years and $10 million to blast away enough granite to construct a pool.  As much as Mimi Rodgers doesn’t want to disappoint Tom Cruise (or Suri for that matter), she is not interested in losing money, even for Tom Cruise.  Tom Cruise also does not want Mimi Rodgers on his property for two years and is suddenly interested in an Olympic sized above-ground pool.

Not sure what to do, Mimi Rodgers reaches out to her pool construction company’s general counsel (this would be you).  She brings you up to speed on the Tom Cruise project and wants your thoughts on the subject.

Assignment

Please prepare an objective memo (addressed to Mimi Rodgers), no more than three pages double spaced (Times New Roman; Size font 12) discussing the following concepts:

Her ability to terminate contract due to Commercial Impracticability

Tom Cruise’s ability to terminate for Frustration of Purpose

The ability of the two parties to mutually agree to terminate the contract

This memorandum need only be structured as follows:

Questions Presented (i.e., what are the three issues you are addressing)

Brief Answer (very brief answer – yes; no; maybe)

Summary of Facts (these would be a recitation of key elements of your fact pattern)

Analysis of each legal question (using IRAC in each instance)