Business Law Briefing Case 1
Lambert v. Barron 974 So.2d 198 (La. Ct. App. 2008)
Donald Lambert and Don Barron were friends. They had a long-standing professional relationship based on their service together on the Louisiana State Board of Licensed Contractors from the 1980s. Lambert had been chairman of the state board, and had established his experience in resolving construction disputes. Barron is a commercial construction contractor doing business in Farmerville, Louisiana. In 1998, Barron’s business began experiencing financial strain because five of his construction projects became mired in various difficulties. Barron and Lambert talked by phone during the summer of 1998 about Barron’s personal problems and financial difficulties, and Lambert was concerned about his friend’s depressed mental state.
On November 11, 1998, Lambert flew from New Orleans to Farmerville to meet with Barron. Prior to Lambert’s flight, Barron’s employee had faxed and overnighted copies of various construction contracts and correspondence relating to Barron’s problematic construction projects for Lambert to review. Lambert contends that, while standing on the airport runway before he boarded the plane for his return trip home that day, he and Barron contracted for Lambert to provide consulting services for Barron. Lambert told Barron at that time that he customarily charged his clients $3,100 per month, and the minimum term for his services was one year. He also charged 10 percent of any amount recouped by his clients in settlement.
In late 2000, Lambert billed Barron for a $34,100 balance owed on the alleged oral contract. Lambert’s letter dated October 30, 2000, requested payment and stated, “I have preformed [sic] my service for you and I must request that you pay me the balance due me of $34,100.” Two weeks later, Barron wrote Lambert back:
I received your bill last week and was very shocked. I do not know where you are coming from, and what you have done to think you deserve any kind of pay. I sent the plane down for you to come up and look over some paperwork and later we sent you some documents for you to take a look at. For your service for a full day and the one to three hours it may have taken, I was planning to pay you $2,000.00 and thought that would be around $150.00 an hour. My people knew you had been here so they paid the $3,100.00 invoice you sent. Then awhile later you called about money and I told you that we had paid you plenty and would not pay you any more. I remember you showing me a long list of people that paid you $3,100.00 a month. I did not tell you I wanted to be on that list. I have not called for any advice since then. All my calls have been to return your call.
Lambert sued Barron for breach of contract. The trial court dismissed Lambert’s case, and Lambert appealed.
Caraway, Judge
This case involves the disputed formation of a contract for consulting services. A contract is an agreement by the parties whereby obligations are created. A contract is bilateral when the parties obligate themselves reciprocally, so that the obligation of each party is correlative to the obligation of the other. Unless the law prescribes a certain formality for the intended contract, offer and acceptance may be made orally, in writing, or by action or inaction that under the circumstances is clearly indicative of consent.
The trial court’s ruling credited Barron’s testimony that he never orally accepted Lambert’s offer for consulting services under the proposed one-year arrangement with $3,100 per month payments. There was no writing reflecting the parties’ consent. Nevertheless, the trial court’s task was also to review Barron’s alleged acceptance of the agreement from the implications of his actions or inaction. In this regard, Civil Code Article 1942 provides: “When, because of special circumstances, the offeree’s silence leads the offeror reasonably to believe that a contract has been formed, the offer is deemed accepted.”
This case involves the special setting of parties with a prior friendship and the aid and advice freely given between friends that existed before Lambert first broached the subject of a consulting contract. In Chaisson v. Chaisson, this court found in a similar setting that an oral loan agreement had been reached be-tween parents and their son. The son admittedly had understood his parents’ intent for a loan for college expenses, but denied his acceptance of the loan agreement. Nevertheless, the son’s actions in receiving the benefits of the loan proceeds in that setting and his subsequent partial payments on the loan were enough for this court to afi rm the lower court’s factual determination of a binding contract. A family setting or close friendship requires the finder-of-fact to determine the offeree’s acceptance of an onerous contract and the offeror’s reasonable belief that a contract has been formed, thus overcoming the competing implications of a benefit extended by one to a friend for a gratuitous reason without obtaining any advantage in return.
From our review of the testimony of the two men, we also conclude that there was no clear agreement given by Barron on November 11, 1998, as Lambert boarded the plane to return to New Orleans. Absent a direct oral or written acceptance by Barron, Lambert’s proof of the [supposed] contract rests on his receipt of certain documentation of Barron’s troubled construction projects and invoices for consulting fees sent to Barron. The bulk of the documentation regarding Barron’s five construction projects was forwarded to Lambert days before the Farmerville meeting. Lambert’s review of the details of those construction contracts and Barron’s problems with the projects would have been performed in preparation for the Farmerville meeting with-out any contract binding his friend. More importantly, Barron provided Lambert that documentation without any indication that his friend’s review of the projects would require compensation.
After Lambert expressed at the Farmerville airport his offer and desire for a consulting contract, some further documentation was provided to him between April and August 1999. These were transmitted by fax to Lambert without any request for specific services. The faxed documents primarily concerned correspondence from Barron’s attorney to Barron reflecting the scheduling of mediation and arbitration hearings. Significantly, Barron’s attorney never consulted Lambert, and Lambert never responded in writing to Barron regarding any substance concerning the status of the construction project disputes during that time. Moreover, Barron never used the principal subject matter of Lambert’s expertise, arbitration, to resolve disputed construction project issues during the year following the alleged oral contract.
From our review of this evidence, we find that the trial court could determine that no tacit acceptance of Lambert’s offer for services was made by Barron. Particularly lacking from the record is evidence of any substantive business benefit realized by Barron from his consultant friend. The trial court ultimately held that the parties’ relationship was that of a “friend helping a friend,” such that Lambert could not have reasonably believed that a contract had been formed.
For the reasons expressed above, the trial court’s determination that no contract was formed between the parties is affirmed.
Affirmed in favor of Barron.
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