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14. Is this result likely to be reversed on appeal?
In the computer whiz's suit against the corporation for damages, the jury found that the contract had been modified by conduct and the trial court awarded the computer whiz substantial compensatory damages.
Because of family problems, the computer whiz delivered and the corporation accepted only two game-designs a year for the first three years; but the games were a commercial success and the corporation made no objection. Accordingly, the computer whiz spent substantial sums on new computer equipment that would aid in speeding up future design work. In the first quarter of the fourth year, however, the corporation terminated the contract on the ground that the computer whiz had breached the annual-quantity term.
An amateur computer whiz agreed in writing to design three new games a year for a five-year period for a corporation that distributed TV game systems. The writing provided, in a clause separately signed by the computer whiz, that «No modifications shall be binding on the corporation unless made in writing and signed by the corporation's authorized representative.»
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A is incorrect. A no-oral-modification clause does not preclude an implicit waiver of a constructive condition. A waiver is not retractable once the non-waiving party has relied on the waiver.
B is incorrect. As explained above, treating a breach as only a partial breach and continuing to perform the contract anyway waived this constructive condition by the conduct of the corporation.
C is incorrect. An unconscionable contract is one that is so one-sided that it is unfair to one party and therefore unenforceable under law. It is a type of contract that leaves one party with no real, meaningful choice, usually due to major differences in bargaining power between the parties. This was not an unconscionable contract because it is not so in favor for the corporation to make it unjustly unfair.