You own a small marketing-research consulting business. You entered into a large contract with an American...
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You own a small marketing-research consulting business. You entered into a large contract with an American retail chain looking for appropriate locations to expand its market into Ontario and British Columbia. The original contract price was inclusive of travel and other expenses. Unfortunately, airfares have increased dramatically in price, and it has been much more expensive than anticipated to conduct the surveys and focus groups necessary across the two provinces. As a result, your business is running into financial difficulties. a. Can you renegotiate the terms of the contract with your American retail client? b. If your client agrees to pay more for the same original services, but then changes its mind and refuses to pay, what can you do? 2. Your business enters into a contract for the delivery of a shipment of toys from a manufacturer in Hong Kong. The toys are in high demand for the upcoming holiday season. When they are delivered, you discover that they are counterfeit goods. On reviewing the fine print of the contract, you see that there are governing law and venue clauses specifying that any disputes will be governed by the laws of Hong Kong in the courts of Hong Kong. a. If the goods have been paid for, what can you do to get your money back? b. If you attempt to deliver the goods to local toy stores and they refuse to accept delivery and pay for the goods, will a court make them pay for the goods, or award damages to your business? 3. You work for a company that manufactures a specialty line of commercial shelving suitable for retail displays. Manufacturing costs have been rising steadily, and you have been negotiating with a new supplier for a key component of the shelving units. The supplier's latest offer is to supply the component for a reasonable, fixed price if your company commits to a minimum monthly purchase for a period of 12 months. a. What can your company do to ensure that the offer remains open while you consider whether to accept it? b. What are the other risks associated with taking time to consider the offer before accepting it? c. If the supplier specifies a deadline for acceptance, can it cancel the offer ahead of the deadline? d. If the supplier specifies a deadline for acceptance, can you accept the offer after the deadline expires? e. What happens if your company responds by agreeing to a six-month commitment? f. If the supplier has made the same offer to both your company and one of your competitors at the same time, what risks does it run? You own a small marketing-research consulting business. You entered into a large contract with an American retail chain looking for appropriate locations to expand its market into Ontario and British Columbia. The original contract price was inclusive of travel and other expenses. Unfortunately, airfares have increased dramatically in price, and it has been much more expensive than anticipated to conduct the surveys and focus groups necessary across the two provinces. As a result, your business is running into financial difficulties. a. Can you renegotiate the terms of the contract with your American retail client? b. If your client agrees to pay more for the same original services, but then changes its mind and refuses to pay, what can you do? 2. Your business enters into a contract for the delivery of a shipment of toys from a manufacturer in Hong Kong. The toys are in high demand for the upcoming holiday season. When they are delivered, you discover that they are counterfeit goods. On reviewing the fine print of the contract, you see that there are governing law and venue clauses specifying that any disputes will be governed by the laws of Hong Kong in the courts of Hong Kong. a. If the goods have been paid for, what can you do to get your money back? b. If you attempt to deliver the goods to local toy stores and they refuse to accept delivery and pay for the goods, will a court make them pay for the goods, or award damages to your business? 3. You work for a company that manufactures a specialty line of commercial shelving suitable for retail displays. Manufacturing costs have been rising steadily, and you have been negotiating with a new supplier for a key component of the shelving units. The supplier's latest offer is to supply the component for a reasonable, fixed price if your company commits to a minimum monthly purchase for a period of 12 months. a. What can your company do to ensure that the offer remains open while you consider whether to accept it? b. What are the other risks associated with taking time to consider the offer before accepting it? c. If the supplier specifies a deadline for acceptance, can it cancel the offer ahead of the deadline? d. If the supplier specifies a deadline for acceptance, can you accept the offer after the deadline expires? e. What happens if your company responds by agreeing to a six-month commitment? f. If the supplier has made the same offer to both your company and one of your competitors at the same time, what risks does it run?
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Answer rating: 100% (QA)
1 Renegotiating the Contract a Yes you can definitely try to renegotiate the terms of the contract with your American retail client Given the unforeseen increase in expenses it is reasonable to approa... View the full answer
Related Book For
Intermediate Accounting Volume 2
ISBN: 9781260881240
8th Edition
Authors: Thomas H. Beechy, Joan E. Conrod, Elizabeth Farrell, Ingrid McLeod-Dick, Kayla Tomulka, Romi-Lee Sevel
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