LEGAL BRIEF OF CASE Kowalchuk v. Stroup Case 8-8
Supreme Court of New York
Summary of key facts: Plaintiffs are mother and son named, Evelyn Kowalchuk, who 88 years of age and a widow, together with her son, Peter Kowalchuk. The plaintiffs invested in brokerage accounts that were allegedly mismanaged by Matthew Stroup, the defendant in this case. The parties filed an arbitration proceeding case before NASD (National Association of Securities Dealers) in December 2005 for damages amounting $832,000 to against defendant for fraudulent handing of their accounts. Prior to the judgment of NASD, the parties entered a settlement agreement wherein Stroup offered to pay $285,000 on February 6 in through an email letter of his counsel. The plaintiffs accepted the offer of defendant. In the meantime, NASD issued a ruling which ordered defendant to pay the plaintiff in the amount of $88,787.50, a smaller amount compared to the settlement offer of Stroup. After receiving the copy of the NASD award, the defendant told his counsel to withdraw the offer.
The Issue: Whether or not the parties have entered into a valid and binding agreement.
The Holding: The Supreme Court held that there was a valid offer on the part of the defendant and which the plaintiffs have accepted. Here, the defendant’s revocation was made after acceptance of the offer. Therefore, defendant can no longer withdraw the offer even if the plaintiffs did not sign the settlement because if it can be established that the parties had the intention to be bound by such agreement.
Summary of your reasoning: The Supreme Court’s decision is correct because there was already mutual promise on the part of both parties. Defendant Stroup has expressed his intention to pay the settlement amount in installments, to which the plaintiffs have accepted. In addition, an offer may only be revoked before acceptance of one of the parties. In this case, there was no revocation because the parties’ acceptance to the offer was made earlier.
Miller, Roger L. and Gaylord A. Jentz, Business Law Today Essentials, 9th edition. California:
Thomson/South-Western, 2008. Print.