You are the Vice President of Supply Chain Logistics for Brewster Brewing Corporation ("BBC"), an international manufacturer of products used to brew coffee, tea, and other hot beverages. BBC also sells some of its products through a few retail operations. Although headquartered in Philadelphia, Pennsylvania, BBC also does business internationally in various countries. Your CEO had a terrible week early this quarter and you are determined not to bother him about things you feel confident you can handle on your own. You were recently promoted to this VP position and you worry that you might be fired or demoted if the CEO thinks that you are not up to the task. During your first few months on the job, you are faced with lots of issues that could have significant implications for BBC's operations and your success in the new role. Here's what happened:

• FEB 7 (9AM): You understand that the VP you replaced entered into various contracts with BBC suppliers. One of these contracts is an exclusive arrangement between BBC and Yama Glass, a company in Taiwan that specializes in hand-blown glass coffee brewers and tea equipment. BBC agreed to source 100% of its glass for its premium line of tea tumblers from Yama for the next 5 years. BBC is in year 1 of the contract. You happen to run into your friend Lisa at the gym who works for SCHOTT North America, a leader in innovative glass production and technology. She says, "Hey, SCHOTT's would love to provide BBC with our new line of specialty glass for your Tea Division." You reply, "Yes, that sounds great." One month later, the warehouse receives a shipment from SCHOTT's, an invoice for $500,000 and a nice letter from Lisa saying she is so glad BBC and SCHOTT's were finally able to contract with each other. You don't recall entering into a contract with SCHOTT's. The warehouse manager wants to know what she should do. How do you handle it?

• FEB 28 (1PM): One of the contracts you inherited is about to terminate and it is your job to find a new supplier. You identify Joeveo as a likely candidate. Joeveo is a drinkware company that manufactures customized mugs. You would like to contract with them to supply mugs for BBC's retail operations. Joeveo sends you a letter that states the following: "Joeveo will supply BBC with 1,000 customized mugs per month for its retail operations. If BBC agrees, please sign the enclosed agreement and return with an initial payment by March 15, 2020. You are busy and don't get around to reviewing it until March 17. You go ahead and get accounts payable to cut you a check, make a minor tweak to the amount (crossing out 1,000 and writing in 1,100) and initial the change, sign the agreement and put it in the mail. Your retail managers call you up weeks later furious that they have no customized mugs. You call up Joveo to find out what happened. They tell you that there is no contract and they are not obligated to send BBC anything. You are outraged and wonder what to do.

• MARCH 5 (4PM): As a new VP, you need to hire an administrative assistant. Your neighbor's son is smart, knows a ton about technology and IT issues, and is incredibly organized. He stops by your house for an informal chat about the job and you are sold. He signs a one-year contract with you. He graduated from high school at 16 (earlier than his peers) and is taking a gap year before going to college. As such, he is free to work for you full time for your first year on the job. He proves himself quite capable for the first few weeks. You travel to Europe on business and have great confidence in his ability to keep things organized. While you are gone, your phone starts blowing up non-stop. At a break you finally answer, only to learn that your new star assistant is a no-show. You text him to find out what's going on and he says he decided to spend his gap year hanging out with friends instead of working. Before you hang up on him you tell him to "hire a lawyer and get ready to be sued for breach of contract." You make a note to confer with counsel about this once you are back in the office.

• MARCH 15 (2:30PM): You are covering for the VP of Advertising for two weeks. A manager from the Ad Department comes to you concerned about a recent meeting with a customer. The customer said that BBC promised her a year of free beverages and products valued at $2,500 during the year and she is threatening to sue if BBC does not comply. The customer points to a recent advertisement the retail store in South Philadelphia used (without running it past legal) that said: "Be one of the first customers through the door on Jan. 2, make a sizeable purchase, and win $2,500 in BBC premium products and a year of beverages on us!" The customer was arguably the 7^th or 8^th person to enter the store. The customer is threatening to sue BBC for breach of contract.

• MARCH 25 (1:30PM): Hunter Hotels contracted to buy 2,000 single-cup coffee machines from BBC, choosing BBC because it was the only vendor who could deliver the large quantity in time for the grand opening of four of its new hotels. The deliveries were to be received on or before Jan 1. The contract states that "time is of the essence" because of the grand opening deadlines. Due to issues with suppliers, BBC missed the deadline and delivered the units on Feb 1. The previous VP in your position never resolved the issue and Hunter Hotels (contrary to its attorney's previous threat not to accept the delivery), did, in fact, accept the order and is currently using the devices in its four new hotels. You call the attorney for Hunter Hotels demanding the $150,000 owed under the contract. The attorney tells you to "go pound sand, BBC should be glad my client hasn't sued you for breach of contract," and hangs up on you. You must decide how to handle this problem.

• APRIL 1 (6:00PM): Without an administrative assistant you are totally swamped. It has become very difficult to keep track of your paperwork and you are quite stressed. You have been in heavy negotiations with Espress Inc., a supplier of parts critical to the manufacture of BBC's premium line of espresso machines. You finish the final course of a five-course meal and agree that BBC will contract with Espress, Inc. for these special parts for $300,000. You need the parts ASAP and agree via handshake, noting that the agreement will be memorialized in writing as soon as you can get a new assistant. Weeks later, not only do the parts not arrive, but your contact at Espress denies that you ever had a deal to begin with. This means BBC cannot manufacture its premium line of products and will most certainly miss the deadlines needed for the holiday rush. You had not yet put the agreement in writing, but you believe that you have an oral contract with Espress Inc. that is valid and enforceable. You think to yourself, "Please let this be an April Fool's joke!"

• APRIL 20 (9AM): You are so bummed about how things have been going that you pull out your contract with BBC and begin looking it over, just in case the CEO decides that you are not up to the task and fires you. To your horror, you realize that BBC's contract contains a non-compete clause that restricts your ability to work for any other manufacturer of products used to brew coffee, tea, and other hot beverages or retailers that compete with BBC within a 50-mile radius for the next 5 years. You were so excited for the new position you remember that you never read the contract and did not have a lawyer look it over before execution. You need to figure out your options.

It is now the end of the month and you are fried. You have your first all-hands meeting with other Senior VPs and the CEO coming up and must provide a supply chain report. To prepare for the meeting you outline the following:

1. Rank the events and decide the top 3 that you will take care of first. Explain your rankings, and describe the harm or potential harm;

2)For each event describe the legal issue (if any) which you think is applicable; and

3)Describe what, if anything, you think you should do in response to each event and explain why.

Answer rating: 100% (QA)

Ranking the Events 1 April 20 9AM NonCompete Clause in BBCs Contract This event has the potential to significantly impact my career and future job opp... View the full answer