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Magness at the rate of $25 per hour for his contracting services
upon completion of the work.
In August 1991, petitioner's attorney drafted a document
entitled "Contract for Services and Consulting Agreement"
(Contract). The Contract, made effective as of June 1, 1991,
purportedly memorialized part of the oral agreement between
petitioner and Mr. Magness. Neither petitioner nor Mr. Magness
read the Contract before signing it.
The Contract contained two main sections: (1) Contract for
Services and (2) Consulting Agreement. The Contract for Services
required Mr. Magness to perform contracting services at a rate of
$25 per hour on petitioners' family residence in Dana Point,
California, and to submit weekly bills for services performed.
The bills were payable on June 1, 1992. The Consulting Agreement
provided that petitioner would serve as a "Consultant and as an
Advisor" to Mr. Magness for a yearly salary of $40,000 due on
June 1, 1992.
Offset provisions in the Contract required that any money
payable under either section of the Contract would be offset by
money due under the other section. The Contract also contained
an automatic termination clause upon the occurrence of a
bankruptcy or insolvency of either party. This clause was
applicable to the Contract in its entirety.
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