As you may remember, Holiday Tree Services, Inc. (HTS) has recently entered into a contract with Delish
Question:
As you may remember, Holiday Tree Services, Inc. (HTS) has recently entered into a contract with Delish Burger (Delish), whereby HTS is to supply and decorate a Christmas tree in each of Delish Burger's one hundred and thirty-seven fast food restaurants in Gould each year in December. The first year of the contract was 2019.
You undoubtedly remember the December 6, 2019's disaster. Oryhat day one of the Christmas trees that we had delivered and decorated in early December to one of Delish Burger's restaurants in Lakeview, Gould caught on fire. The fire then severely damaged the restaurant's premises, including the kitchen and dining areas. Earlier today, I received an angry call from Duran Austin, the president of Delish, updating me on the recent calculations of losses from the disaster.
Our records indicate that the Christmas tree was delivered to Delish Burger's Lakeview site on time and in good order on the morning of Friday, December 6th, 2019. As the manager on site requested our delivery crew, they placed the tree inside the restaurant in an area next to the ordering counter. The crew then spent the next two hours, as they routinely do, decorating the tree to the satisfaction of the on-site manager, Leon Grant. Mr. Grant then initialed the receipt provided to him by our delivery crew, acknowledging receipt and full satisfaction with the decorated tree. Mr. Grant then fully paid for the tree and the services with a company check.
The fire broke out inside the Lakeview restaurant just as the last employee was leaving at approximately
11:37 p.m. on December 2nd. Fortunately, there were no customers in the restaurant at that time as the store generally closes at 11:00 p.m. on weekdays. Mr. Austin indicated to me during the phone conversation that a report he received yesterday from the local fire department tentatively concluded that the fire originated from the Christmas tree. He went on to say that the report indicates that the lights on the tree required too much power for the one outlet they were plugged into, causing an electrical short.
The spark from this instantly ignited the tree. The employee, who had been about to unplug the tree and turn off the lights in the restaurant, was so shocked that he instantly ran out of the restaurant. He then searched for a phone to call the fire department (in his haste he had left his cell phone inside). It took a few minutes to find a phone, giving the fire a chance to spread. Mr. Austin also said that as a result of the fire, the restaurant has been completely shut down for the past three months and that he does not expect the restaurant to be open for at least another three months pending complete renovation of the damaged areas.
Mr. Austin then demanded compensation for the losses that Delish's restaurant sustained as a result of the fire. He faxed me a copy of the construction bid Delish's restaurant accepted to reconstruct the premises, which came out to $575,000. In addition to the reconstruction costs, he also demandscompensation for the potential profits the restaurant could have generated during the downtime. I am attaching the documents I asked him to fax me, which include some of Delish Burger's financial data regarding revenues and expenses during 2018 and 2019.
I told Mr. Austin that I sympathize with the lost profits sustained by Lakeview Delish Burger, but that according to our agreement, Delish Burger agreed to waive all claims against us for any consequential damages. After he quickly looked at the Purchase Order Acknowledgment, he said that while there was such a clause in the document, it was not part of the contract since Delish Burger never agreed to it or signed it. I replied that I would look it over and get back to him soon.
TranscribedTextInternational Business Law And Its Environment
ISBN: 9781305972599
10th Edition
Authors: Richard Schaffer, Filiberto Agusti, Lucien J. Dhooge