In line with the requirements of the court where I have filed a case against my Muscadine products supply, the case has been referred to mediation. The court has a rule requiring that a mediator handle all cases before it. It is only when the arbitration option fails that the court will hear the matter and makes a determination through the judicial process. Given that you are the mediator for this case, I would like to share with its full details as bellow.
Facts of the Case
The suit arises from a business relationship that has been going on between my supplier and I for three years. I run a company that deals with local food products. I first met my supplier at a church gathering where he is a Sunday school teacher. I was in the company of my wife. After introductions, my supplier, on realizing that my business purchases local food products for sale suggested that his family company could supply me with a new product. After deliberations, I agreed stocking their products, which were an assortment of Muscadine grapes. I placed a phone order with their company, and they supplied me with the products promptly. With time, this became regular because the grapes had become popular with my customers. For the period that followed, I placed regular orders, and they supplied me on the same terms as before, same prices and same quality. After receiving the products, I would pay after a fixed period of 45 to 60 days.
In my view, the fact that we stuck to our terms for so long meant an implied contract was in place. That is what the law requires (JEC, 2015). However, I decided to enter into an express contract with the company for the avoidance of doubt. I engaged a representative of the company who also doubled as a supplier in signing a contract after discussing it with him. Under the agreement duly signed by both me and the representative of my supplier, they undertook to continue supplying my company with Muscadine grapes on the same terms as were already in place I the implied contract. After that, my suppliers continued to offer their services, and I would pay in time. In my view, the contact had secured my company reliable future supplies. I, therefore, embarked on an aggressive marketing campaign that led to an investment worth thousands of dollars in advertisements. This campaign succeeded since many clients placed orders with me because of my concerted marketing campaigns. I began to receive orders from everywhere with articles on the product appearing in a column on The Huffington Post.
It was at this point that my supplier suddenly communicated to me their intention to stop their services because a company based in Texas was offering them twice what I was paying at the time. They advised me to approach another company offering the same products. They claimed they were terminating the business relationship with me since they had received a better off from the Texas-based company. This act was a breach of both the implied contract that existed between us and the written contract that the business's representative had signed on its behalf.
Contracts at Issue
Unlike a written contract, an implied contract arises from the conduct of the parties involved and is fully enforceable in law. It exists where one party accepts benefits from another in exchange for a fair value for the benefit in question. In the circumstances of this case, my company accepted an offer to buy Muscadine products from my suppliers. I was to receive a lucrative benefit that would give me a better grip on the market. Despite the absence of a written agreement, I was still going to receive a steady supply. The terms of our dealings remained unchanged. The deal thus means that we had both accepted them as the terms of the implied contract. That is why neither my supplier nor I changed the conditions over the period. This situation is a clear indication that my supplier recognized the existence of a contract between my company and his.
The second contract in question is the express contract that my company signed with the vendor. Even though the contract contained the terms under which we had been dealing with the entire period of our business relationship, it constituted an entirely new contract and did not operate to terminate the initially implied contract. I must say that the party who signed the deal on behalf of the company is not only an authorized distributor of the company but also the son of the owner of the enterprise (James, 2013). Even if, for some reason he lacked the authority to sign a contract with the business, we reasonably believed he did due to his close relationship with the owner of the enterprise. By engaging him, we were sure he would communicate the matter of the contract to his father who owns the company.
Both parties to this case have raised some legal issues. One of the legal issues that we will present before the arbitration panel is whether there existed a contract between the two parties and, the terms of that contract (Carl, 2008). In making this determination, the arbitrator will also look into the question of the capacity of parties to a contract. Our opponents allege that the person who signed the second contract was a minor of 17 years. The arbitrator will thus have to shed light on how this affected the contract. We have maintained that the doctrine of Estoppel supports the existence of an implied contract between our company and the suppliers. The arbitrators will determine whether the principle of Estoppel stops our suppliers from denying that there existed an implied contract.
The company will request some remedies available for breach of contract. One such remedy will be damages. The damages will cover the loss that the company will incur because of its inability to serve its customers. This is due to a shortage of supply following the withdrawal of our suppliers (Australian Government AG’s office, 2015). We are also seeking an alternative remedy of specific performance to compel our suppliers to continue giving us their services as per the terms of the contracts (Jason, 2015).
Compromise and Settlement
We are willing to negotiate a settlement of the dispute by compromise in some areas. Our intention is not to lock our suppliers out of the better deal they have won (Sue, 2015). Our position is that if our suppliers can accept that our relationship amounted to an implied contract, then we can do away with the second written contract and negotiate on the implied contract. We may also allow our opponents to pat only half of the damages requested if they accept responsibility for breach of contract.
Australian Government AG’s Department. (2015). Remedies for Breach of Contract. Retrieved from https://www.ag.gov.au/Consultations/Documents/ReviewofAustraliancontractlaw/ Remediesforbreachofcontract.pdf on 13th July 2015.
Carl, P. (2008). What are Implied Contracts?. Retrieved from http://fcw.com/Articles/1998/11/15/What-are-implied-contracts.aspx?Page=1 on 11th July 2015.
James, N. (2013). 10 Key Facts About English Contract Law. Retrieved fromhttp://www.seqlegal.com/blog/10-key-facts-about-english-contract-law on 11th July 2015.
Jason, C. (2015). Enforceability of an Arbitration Clause in a Contract. Retrieved from http://www.legalmatch.com/law-library/article/enforceability-of-an-arbitration-clause-in-a-contract-for-the-purchase-or-sale-of-goods-products-or-services.html on 13th July 2015.
JEC. (2015). Remedies for Breach of Contract. Retrieved fromhttp://jec.unm.edu/education/online-training/contract-law-tutorial/remedies-for-breach-of-contract on 11th July 2015.
Sue, F. (2015). How To Write a Business Memorandum. Retrieved from http://www.dummies.com/how-to/content/how-to-format-a-business-memorandum.html on 13th July 2015.