Are You Legally Obliged To Keep Your Promise? What Are The L

Are you legally obliged to keep your promise? What are the legal remedies?

You are the manager of a large flower shop, responsible for overseeing operations and employees under the employment of James, your employer. You earn a salary of $100,000 annually. The business employs approximately 15 staff members, including two cleaners and six flower arrangers. Recently, two flower arrangers, Dan and Sam, have expressed their desire for a pay increase, demanding an additional $5 per hour. Despite your repeated explanations that any wage adjustments require approval from James, who is currently overseas, Dan and Sam have become increasingly insistent. On a particularly busy Wednesday, they confront you directly and threaten to walk out with four other flower arrangers unless their demands are met immediately, threatening to leave you to manage the shop alone during the peak period. Under duress, you promise to increase their wages as requested. After the day’s work, you reflect on the legal obligations of this promise and the potential consequences if the orders are unfulfilled, leading to a loss of $10,000.

Paper For Above instruction

The scenario presented involves complex issues related to employment law, contractual obligations, and the consequences of promises made under duress. This essay examines whether the manager is legally obliged to honor the promise made to Dan and Sam, explores the potential legal remedies available, and considers what could occur if the shop failed to fulfill orders resulting in financial loss. The analysis applies the issue/law/application/conclusion framework, referencing relevant legislation and case law to illuminate these legal questions.

Issue

The primary issue revolves around whether the manager's promise to increase wages under duress is legally binding and enforceable. Specifically, it questions whether the promise constitutes a valid contractual agreement and what legal obligations arise from it. A secondary issue concerns the potential legal consequences faced by the owner and manager if the workers walk out and the business suffers significant financial loss, especially in the absence of a binding agreement to retain employment under the threatened circumstances.

Law

In employment law, contractual obligations are typically grounded in the employment contract, which is formed through mutual agreement between the employer and employee. An essential principle is that a contractual promise must be made voluntarily; agreements obtained under duress are generally not enforceable (Coulls v. Bagot’s Waterproofing Pty Ltd (1967) 119 CLR 460). Duress involves coercion or pressure that vitiates genuine consent. In this context, the manager’s promise was made under threat of employee walkout during peak hours, possibly constituting economic duress. According to common law, a contract or promise induced by duress may be invalid if it can be demonstrated that the consent was not freely given (Resco Steel Pty Ltd v. Minister Administering the Workers’ Compensation Act 1987 (1992) 180 CLR 80).

Furthermore, employment agreements generally cannot be unilaterally modified without following proper procedures, such as negotiation or approval from the employer or relevant authorities. If an employee demands an increase and the employer unilaterally concedes under threat, this may not constitute a binding contractual change, especially if the employer’s internal policies stipulate that wage adjustments require management approval.

Regarding legal remedies, if the promise is deemed unenforceable due to duress, Dan and Sam may not have legal grounds to enforce the wage increase. Conversely, if the promise is viewed as binding (despite being made under duress), the employer may be compelled to honor it, subject to certain defenses or exceptions. Concerning breach of contract, damages may be claimed if an employee breaches the terms of a valid contract, which could include lost profits from a failure to fulfill business orders.

Application

Analyzing the specific facts, the manager’s promise to increase wages was made under significant pressure—namely, a threat to walk out during the busiest business day, potentially halting operations and incurring substantial financial losses. Under legal principles, such a promise might be categorized as made under economic duress. If courts find that the promise was entirely coerced, it is unlikely to be enforceable as a contractual obligation. The doctrine of duress recognizes that an agreement made under unlawful or improper pressure may be invalid, protecting parties from being bound by involuntary commitments.

However, the situation is complex. The employees threatened to leave unless their demands were met immediately, which can be argued as a form of duress because their pressure directly influenced the manager's decision. If Dan and Sam file a claim, they would need to demonstrate that their agreement was not voluntary, which is supported by the fact that the manager capitulated due to the threat during a critical business period.

From the employer’s perspective, if the manager had refused to increase wages and the employees left, the shop could face infringement of employment rights, but legally, the manager would be operating within the bounds of the law by adhering to proper procedures—i.e., seeking approval from James for wage increases. Without proper authorization, the promise might be considered informal and not legally binding. Therefore, the employer could argue that no valid contractual obligation exists to pay the increased wages.

Regarding the potential financial loss of $10,000 due to unfulfilled orders: if the employees had walked out without an enforceable agreement, the business would likely be liable for breach of contract only if there was a formal or implied contract with the customers or if the shop had specific contractual obligations to fulfill those orders. However, since the orders were critical and the manager had promised to fulfill them, failure to do so could be viewed as breach of contractual duty, and the shop could face damages corresponding to the loss incurred, i.e., $10,000.

Suppose, on the other hand, the manager had refused to honor the promise, and the employees walked out, canceling orders during a busy period. In that case, the shop might have grounds to claim damages for breach of contract or negligence if it can show the breach caused the financial loss. The shop’s claim might be based on the theory that the manager's promise, if enforceable, was intended to prevent such damages, but as discussed, the enforceability of that promise is questionable.

To mitigate such risks, employers should ensure that any employment adjustments are made through formal procedures, documented properly, and approved by authorized personnel like James. Relying on informal promises, especially made under duress, exposes the business to legal risks and potential disputes over enforceability and damages.

Conclusion

In conclusion, the manager’s promise to increase wages under coercion likely does not constitute a legally binding contractual obligation due to the principles of duress, which void agreements influenced by wrongful pressure. Legally, unless the promise is validated through proper management procedures and authorized by James, it remains unenforceable. If the employees walk out without a valid contractual commitment, the employer's legal remedies include pursuing damages for breach of contract, particularly if the business suffers monetary loss, such as the $10,000 from unmet orders. To avoid such disputes, employers should adhere to formal processes for employment adjustments and avoid making commitments under duress that lack proper authority, thereby safeguarding against potential legal liabilities and ensuring operational stability.

References

• Coulls v. Bagot’s Waterproofing Pty Ltd (1967) 119 CLR 460
• Resco Steel Pty Ltd v. Minister Administering the Workers’ Compensation Act 1987 (1992) 180 CLR 80
• Slade, R., & Tustin, D. (2014). Business Law (8th ed.). Cengage Learning.
• Kerr, D. (2018). Contract Law (2nd ed.). LexisNexis.
• McKendrick, E. (2019). Contract Law (9th ed.). Palgrave.
• Gordon, R., & O’Neill, J. (2020). Australian Employment Law. Federation Press.
• Gilbert, D. (2017). Principles of Employment Law. Oxford University Press.
• Farnworth, A., & Thwaites, G. (2016). The Law of Employment. Routledge.
• Australian Law Reform Commission. (2019). Review of Contract Law Principles. ALRC Report.
• Heydon, J., Heydon, H., & Leeming, M. (2017). Meagher, Gummow & Lehane’s Equity Doctrines and Remedies (5th ed.). LexisNexis.