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DISCUSSION BOARD FORUM 2 CASE STUDY
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Check My Assignment!Don Willetts and his wife Dana began visiting the Sunday School class you teach in New Bern, NC about 3 months ago. Don is not a Christian, but with the encouragement of his wife who is, he says he is beginning to explore the faith.
After his first visit to the class you spent some time talking with Don and you discovered that he owns a small, local health food products business, and that he is interested in growing the business by adding some new product lines. You informed him of the high anti-oxidant qualities of the Scuppernog grapes your family produce company sells and you asked him if he might be interested in promoting either the grapes themselves or various products, pills and such, developed using their seeds. Don is interested, and a few days later you supply him with some samples. The samples turn out to be a very popular item with his regular customers, so he places a modest phone order with your company. Over time Don places regular, increasing phone orders, and he begins investing heavily in advertising for the Scuppernog products at his store. Your company has faithfully delivered everything requested, promptly, and at consistent prices. You typically sent an invoice with each delivery requiring payment within 30 days, and though Don has frequently been late making payment, he has generally paid each invoice with 45 to 60 days, and you have elected not to charge him any interest or penalties, though your invoices state that you reserve the right to do so.
On one occasion when your 17 year-old son, a part-time deliveryman for your company, delivered some product to Don’s store, XXXXX XXXXXded your son a requirements contract and asked him to sign it on behalf of your company. The contract includes a guaranteed price schedule consistent with that which he has been paying. Don told him that it was “just a formality’ to guarantee a continuing business relationship. Your son signed the contract and gave it back to Don. Neither Don nor your son mentioned the contract to you.
After a columnist for the New York Times wrote an article praising the anti-oxidant qualities of Scuppernogs, the demand for Scuppernogs skyrocketed nationwide. Your company became inundated with orders, far in excess of your ability to meet the demand. A company in Connecticut offered to pay you twice the going rate for your products, but they also required that you to sign an output contract as a part of the deal.
Though this contract would represent a substantial financial windfall for your company, you felt bad about potentially leaving Don out to dry. You called Don, advised him of the offer you had received, and to try and soften the blow, you suggested to him the names of other reputable potential suppliers in the area.
To your surprise, Don became very angry and told you that he expected you to continue supply him with all the product he needs, when he needs it, and at the prices he had always paid, per the requirements contract between your businesses, and in accord with an implied duty of good faith and fair dealing that had evolved based on your ongoing business relationship. When you asked what requirements contract he was talking about, he faxed you over a copy of the contract that had been signed by your son.
