You run a successful business supplying signature shampoo to hair salons. When the lockdown began, many of your clients cancelled their orders, but being a graduate of the Seneca School of Business, you seize the opportunity to change your business model. Instead of selling exclusively to (the now closed) hair salons, you begin to sell online, direct to salon customers. Fortunately, this saves you and while you lost business sales from many of your salon clients going out of business, or pausing their orders until the pandemic ends, you are even more profitable than ever. 

Your business and signature brand has a great reputation in the industry, and its looking like you have a promising and profitable future. One of your oldest and dearest business clients, a hair salon down the street from your home, missed payments on the last few deliveries. Even though her salon has been closed to the general public, she has continued to place and receive orders from you to sell the signature shampoo to her customers using a curb-side pickup. Her online presence is formidable and she has a massive social media following. You decide to call and let her know that you do not want to keep extending credit and making deliveries but are not sure how to handle the non-payment. She informs you that the money she receives from those curb-side sales of your product is her only source of income. Without them, she would not have enough to cover her rent and would end up losing her salon. It has been three months of missed payments and you decide you have had enough. It is possible the lockdown will be lifted in a month or two, but there is no guarantee.

With reference to the legal principles learned in this course regarding contract law, dispute resolution, and legal risk management, answer the following three questions:

1. Would you mediate, litigate, or retain the losses? Why? (3 marks)

2. Would you continue to make the deliveries until the lockdown ends, or stop further deliveries? Why? (3 marks)

3. What terms might you include in future contracts to prevent this from occurring again? (3 marks)

Answer rating: 100% (QA)

answer 1 i would go for mediation because she is one of my oldest and dearest business ... View the full answer