Question Completion with Answer Options:
A. Yes, according to the terms of her contract.
B. Yes, according to the duty of good faith and fair dealing.
C. No, according to the at-will termination provision in her contract.
D. No, because subsequent conduct of the parties modified the contract.
Answer:
Fountain Valley, Inc. and Alice
B. Yes, according to the duty of good faith and fair dealing.
Explanation:
Alice is entitled to the bonus of $10,000 because the duty of good faith and fair dealing requires Fountain Valley not to deny Alice the benefits arising from their valid contract. Since Alice's employment contract included a 5% bonus of all sales in excess of the previous 12 months' sales, the Fountain Valley, Inc. should not deny Alice's claim to the benefits.
b) Employment contract terms = $78,000/year plus 5% bonus of all sale in excess of the previous 12 months' sales. The value of sales in 2017 is $200,000 more than in 2016. 5% of $200,000 = $10,000. Therefore, Alice is entitled to the bonus.
