Opinion ID: 1619783
Heading Depth: 3
Heading Rank: 1

Heading: Is the contract still valid?

Text: ¶ 19. The Baileys urge that the contract entered into with Kemp and Moses is invalid for a number of reasons, among them breach of fiduciary duty, duress, fraudulent concealment, and lack of adequate consideration. The chancellor found no flaws in the contract and upheld it in its entirety. ¶ 20. Indeed, the terms of the contract are laid out clearly and at length. The Bailey family received exactly what was promised under the contract: the satisfaction of Janet Bailey Lapp's loan, plus 8% interest, the avoidance of bankruptcy, and hundreds of thousands of dollars in proceeds after all transactions were completed. The evidence demonstrated that the debt against the properties was roughly $1,405,587, and that the efforts of Moses and Kemp resulted in proceeds of $1,978,180, or a net result of $572,593. [5] ¶ 21. It is axiomatic that estoppel forbids one from both gaining a benefit under a contract and then avoiding the obligations of that same contract. A party cannot claim benefits under a transaction or instrument and at the same time repudiate its obligations. Wood Naval Stores Export Assn. v. Gulf Naval Stores Co., 220 Miss. 652, 664, 71 So.2d 425, 430 (1954). This doctrine, termed quasi-estoppel, precludes a party from asserting, to another's disadvantage, a right inconsistent with a position [it has] previously taken, and applies when it would be unconscionable to allow a person to maintain a position inconsistent with one to which he acquiesced, or from which he accepted a benefit. Bott v. J.F. Shea Co., Inc., 299 F.3d 508, 512 (5th Cir.2002). This is exactly the situation at hand; the Baileys cannot profit under this contract and also seek to have it declared invalid where their obligations under the contract are concerned. [6] ¶ 22. Estoppel also works against the sudden concerns about the amount of fees that Kemp and Moses received. The nature of the fee split was laid out explicitly in the contract and the previous MOU, and the contract expressly stated at great length and detail that [i]t is understood and it has been discussed that the fees to Andrew T. Moses, Jr. and William G. Kemp may be substantial when finally paid. However, it is further understood and agreed between the parties that, under the magnitude of the circumstances in which they have worked and are continuing to work. . . . said fee arrangements . . . are considered by all parties to be perfectly reasonable under the circumstances and exigencies of the situation. Janet Bailey Lapp even testified at trial that she did not read the contract, although Kemp had read portions of it to her. However, [u]nder Mississippi law . . . parties to a contract have an inherent duty to read the terms of a contract prior to signing; that is, a party may neither neglect to become familiar with the terms and conditions and then later complain of lack of knowledge, nor avoid a written contract merely because he or she failed to read it or have someone else read and explain it. MS Credit Center, Inc. v. Horton, 926 So.2d 167, 177 (Miss.2006). The Baileys cannot now complain of the fee arrangement which they entered into freely and benefited from. [7] ¶ 23. Further, to invalidate a contract on grounds of economic duress, the complaining party must establish: (1) that the dominant party threatened to do something which he had no legal right to do; and (2) that the wrongful threat overrode the volition of the victim and caused him to enter an agreement against his free will. Kelso v. McGowan, 604 So.2d 726, 732 (Miss.1992). The trial court found no evidence of such conduct surrounding the formation of the contract, and as noted above, all parties signed over a series of weeks in the presence of a notary public. ¶ 24. Lastly, the contract should be upheld as a matter of equity. The parties, all educated persons, knowingly entered into a highly-detailed and specific contract. To avoid the obligations it created would now mean a windfall for Bailey, despite the contract's express intention to endure until its terms were completed. [8] ¶ 25. Accordingly, the chancellor was correct in finding the contract to be valid.