Case study 1
Christmas season is important to Ken’s store as it increases sales. A contract agreement was made by Ken (storeowner) and Sweet Inc. whereby, sweet Inc would supply Ken with 10,000 pounds of sugar on 15 November or before. However the offer made by the offeror expired because Sweet Inc. did not meet the deadline. Considering this agreement an offer was made and the other party accepted. This means that Sweet Inc., promised to deliver the goods before the deadline. Considering Legal law, Ken was in a position to purchase somewhere else in case Sweet Inc did not meet the deadline. He could decline the offer incase the deadline was not met. That is why he decided to purchase sugar from another company. This agreement can be termed as a bilateral contract because Sweet Inc. promised to deliver sugar to Ken as long as it is on a time schedule (before or on 15 November). The delays made by Sweet Inc., forced Ken to purchase sugar from someone else. This cost him extra expense above which they had agreed with Sweet Inc.
However, as a judge, it would be appropriate to consider both sides and give a fair judgment. Sweet Inc had a genuine reason for late delay. Management changed and production was altered. Several production problems may have led to the low production. For example, delays in supply of raw materials to the company and high cost of transportation because of poor management. In addition, there may be seasonal factors that may have caused the delay of transportation. In an instance where they were not included, in the agreement, then Ken would be considerate while pressing charges. Sweet Inc. should be responsible for paying his loses Ken incurred. In spite of the delays, Sweet Inc. should not be blamed for Ken loss of customers. He should have had an alternative because it was a risk he was taking. The offer was void because the subjected matter was destroyed and could not be fixed, as there was already a delay.
Sweet Inc. should only pay compensatory damages, as their agreement included only delivery dates. The person who made the offer never included the idea of payment of uncompensated damages. Therefore, even if he loses customers may be due to his in competences. Ken was determined to sue Sweets Inc. for breaching their contract. In order to sue the company, Ken is supposed to give a rough estimate on of the liquidity damage he faced due to delays of sugar delivery. In addition, the damages had not been predetermined in advance therefore; the court should be in a position to settle the matter in a fair way. As a judge would put it, the common law on liquidated damages should be enforced to compensate the party that was breached rather than punishing the other party. Therefore, Ken was to determine the approximate value of damages the sweet company had inflicted on it and get compensated where necessary.
When Sweet Inc breached the contract, they had to pay compensatory and consequential damage. The compensatory damage was the amount extra amount Ken used to purchase the sugar. This means that for every pound of sugar Sweet Inc. would pay 10 cents more to recover Ken’s expenses. On the other hand, there were consequential damages that had to be paid. Mathematically, Ken used 11% more than he had planned. Therefore, in addition to the compensatory damages, Sweet Inc. should pay 1100 pounds of sugar or an equivalent to Ken.
Case study 2
A given university plans to construct a hospital. Therefore, it requires a general contractor who will coordinate the project. Thomas, a general contractor works his way out and gets the job after having an agreement with Trans Vac’s. The agreement between Trans Vac involves a bid of $ 287000. However, before the construction began, Trans Vac gave its grievances to Thomas regarding the initial bid. They threatened to back down if they were not given an increment.. Thomas the general contractor promises to pay the subcontractors $ 287000 when they finish their contract. However, this deal is breached as one party calls the deal void due to some in competences in terms of financial issues the company is facing
Due to unavoidable circumstances, Thomas agreed to an increment of $ 32000. This is a bilateral contract because two parties are making promises However Thomas did not stick to his promise as he only paid the initial amount ($ 287000).
Considering the described contract and the situation discussed, it was permissible for Trans Vac to ask for an increment. There are situation that may pressurize the company to ask for an increment. For example, in case of sudden inflation, price of good may increase and may affect the subcontractors. In addition, if the workers do not agree with the bid in place then it would force Trans Vac to ask for supplements. The important concept is it to determine if the contract is feasible and flexible to be administered. After identifying considerations, relating to the contract, the two parties should have come up with a solution to the problem even if it involved payment in installments. In the end, both parties would have gained without conflicting in terms of payment issues. In addition, it is correct to say that Trans Vac had the opportunity to demand for increment even if they had an agreement initially. The offer may have become invalid after realizing that Thomas was going to get a huge deal out of the contract. After Thomas had discussed and agreed on the bid, Thomas submitted another bid that would be to his favor. It is not indicated how much he asked the university to pay him for the job. However if it were a large amount then, the sub contractor could feel over exploited.
When two parties have an agreement and signed a contract, both parties should not breach it. They should endeavor, to work in accordance to the rules of the contract. In case a party fails to reach its part of the deal, then it can be sued and eventually they pay a penalty. In this instance, Thomas made a mistake in refusing to pay the subcontractors all that he owed them. If he did not want to pay them then he should not have agreed to pay them the increment fee as they had agreed later on. When someone fails to pay his contractors, he loses trust of the people. Thomas acted dumber not knowing that he could later on need the help of these contractors.
In conclusion, it is vital to note that a promise is a debt. Therefore, people should make it a point to live to their promises. In the incidence of any shortcoming, the participating parties should conclude to avoid misunderstandings. They can also look for a mediator who can help them come to an understanding.
