ContractsProf Blog

Editor: Jeremy Telman
Oklahoma City University
School of Law

Friday, March 1, 2024

Friday Frivolity: Elon Musk, This Is Not up to Your Standards

 RocketmanSeveral of my students shared the same story with me.  Ariel Zilber, writing in The NY Post, provides the basics:

  • Corporation places a large order with a bakery for mini pies.
  • Corporation then contacts the bakery to double the order. 
  • Corporation then cancels the order by text  just as the pies are about to be sent out.
  • Bake shop claims $16,000 in losses on the order
  • CEO of the corporation (depicted at right, image by DALL-E) promises to "make things good" with the bakery.

Not much to add, beyond the fact that the corporation is Tesla, and the CEO is Elon Musk.

At first, I didn't see much potential in the hypo.  Tesla made a contract; Tesla breached the contract.  Tesla must pay damages.  Making things good with the bakery is a simple matter of paying for the pies that Tesla ordered, less any mitigation.  And since you are Tesla and this is a local bakery, why not just pay $16,000? As contracts hypos go, Mr. Musk, I expect better from you.  Remember that time you promised to buy Twitter and then pretended that it was all just a ploy to get information about the percentage of bot accounts on Twitter? 

Ah, good times. 

A few wrinkles might make this into a worthy hypo.  First, let's assume (counterfactually, apparently) that the original order and the doubled order were done by telephone and there is no electronic record.  Is the text message a sufficient writing to evidence the transaction?  According to the Post, the text read as follows: "It unfortunately sounds like we will be changing plans and will not be needing this order. Thank you so much for your support. I appreciate it."  Seems like that message must be part of a text string that provides the referent for "this order."  If so, we likely have a writing.  If not, do we have specially manufactured goods?

On that point, and also relevant to mitigation, Richard Pollina, author of another NY Post article, adds the following information.  As news of Tesla's breach spread, local residents shows up "in droves" to snatch up the pies.  If she had 4000 pies at $4/pie, it seems like the owner could have mitigated her damages by re-selling those same pies at $6/pie.  The owner also said that her business has tripled since news of the breach got out.  Is that relevant to the calculation of her damages? She also said that, notwithstanding Mr. Musk's promise to 
"make things good," she has not heard from him.

Screenshot 2024-03-01 at 6.54.53 AMSide note on the efficient use of journalistic resources: Do we really need two NY Post reporters on the Tesla pie-order beat?  Even Taylor Swift only has one dedicated reporter per news outlet. 

UPDATE: David Propper, yes a third NY Post reporter, provides the following update.  Tesla paid the bakery $2000 and also offered to place an order for Women's History month.  The bakery responded that it was too booked up with orders to provide pies to Tesla.  Also, it asked, "Good Grief!  Who do you think I am?"

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