Business Environment - Les - Assignment Example

Business Environment The case related to Les offering distributorship to Mary first and James has different implications under the UK law. Les is a manufacturer of office equipments. He developed a printer that was about to take the market by storm, and he was willing to give distributorship to a competent personnel. He identifies Mary and James to be the best suited to promote his new development. He writes to both of them with his proposal and asks them on their interest to become his distributor. He gets the acceptance of both parties. 1. He then writes to Mary first with his offer to give her the distributorship with an offer of 10% commission and states that should she fail to reply before June 11th, he would consider her silence as her acceptance of the distributorship. Mary responds positively to Les’ offer, but because the letter was addressed incorrectly, Les does not get any response from her, until June 13th. 2. Meanwhile, on 11th June, James, takes the initiative to make a proposal to Les that he would be more than willing to accept the distributorship at 5% commission. Les immediately telephones Mary and tells her that the post of sole distributor was no longer available. 3. Mary insists, however, that there is a binding contract to appoint her. Considering the above points, it’s quite clear that though Mary had not signed a contract, she was within rights to say that there was a binding between the two in the business. Les made it very clear in his letter to Mary that even if she failed to respond to the offer made by him, he would acknowledge it to be a positive indication of acceptance of the offer. Mary responded positively to Les’ offer on the distributorship but posted it to a different address causing a delay. Les ultimately received this letter a few days after he concluded the distributorship with James. Les had a binding with Mary, and unless she rejected his offer, he could not appoint another distributor in her place. This, by law, is a breach of contract. James had every right to make an offer to Les for the distributorship. He was not aware of the offer made to Mary and waited for an opportune moment to make the offer. Thus, James has not in any way breached the law. Les is guilty on three counts. Les should not have made an offer that was self-destructive. He should have made an offer to Mary and set a deadline for her acceptance or rejection of the offer. This would have saved him from legal binding. Secondly, when James made the offer to Les, Les should have consulted Mary first, before appointing James as his distributor. This way, he would have avoided any legal binding that Mary was referring to. Les was taken in by the attractive offer made by James and didn’t stop to think before committing himself to the contract. Though Les can safely say that he did not have any legal binding with Mary because of a non-existent signed contract between them, he was guilty of writing his total acceptance of her service even if she refused to respond to his offer, unless of course she wrote to refuse the offer altogether, which she didn’t. Recommendation: Les is guilty of breach of trust and he should first offer the distributorship to Mary, before offering the same to James. Though there is no signed agreement between Les and James, Les should offer Mary the first option. Should Mary decline the distributorship on a non-trust motion, and then he should take it in writing from her that she has no objection to James taking the distributorship. Only then can James be a part of the business tie-up with Les. Mary can always take Les to court based on his offer letter and this could affect his future business prospects. Thus, he should offer Mary the distributorship, or get her written consent for James to take the distributorship. The Law In the above case, as Les has no written agreement signed by Mary, or a binding that makes it mandatory for Les to appoint Mary as his distributor, there is a certain critical element involved in Les’ communication to Mary. What does a contract involve? There are three factors necessary to create a contract: 1. An offer 2. Acceptance 3. Consideration One party makes an offer (in this case, Les), the second party (Mary) must accept the offer and there must be consideration exchanged. Consideration has to be something substantial and effective. All of these factors must be met for the contract to be enforceable (Legal Elements of a Contract). Les made an offer through a letter to Mary which was accepted by Mary in writing (not known to Les). Since Les never received Mary’s acceptance before accepting James’ terms for distributorship, there was no question of disagreement between Les and Mary on Considerations. Les has a binding on Mary as he stated in his letter, and thus must discuss his offer to James with her before signing a contract. This Les did through his call to her. Mary’s letter of acceptance reaches Les a little later than expected and this makes Les’ position regarding the offer to James controversial. The possible solutions that Les has to avoid controversy or legal predicaments are: 1. Offer Mary the distributorship at 10% commission 2. Ask Mary to give a written reply negating her interest, which might be doubtful 3. Allow both Mary and James to work as distributors in different precincts Since Mary has shown considerable interest in the offer by Les for the distributorship, she may not be willing to abdicate her position and allow James the distributorship. Les finds James offer of working on 5% most appealing and would therefore seek to negotiate with Mary to part with her claim for distributorship. Should this fail, Les can seek to work with Mary on 10% and James on 5% margins as distributors. Since there is no firm agreement signed between Mary and Les, Les is entitled to seek an Alternative Dispute Resolution (ADR). ADR refers to a method of resolving disputes by means not associated with formal litigation. The most common procedures pertain to mediation, arbitration, facilitation, or conciliation. In such cases, there is the presence of a person who acts either as the facilitator or decision maker. This facilitator is neutral, and provides an unbiased opinion. What is most pleasing with ADR is that, it allows everyone to have an active part in the decision-making process. Solutions and resolutions are adopted by consensus, and address the concerns and understanding of the interests of all parties. The ADR is tailored to include all possible solutions to meet the needs of the participants without bias, and encourages the creative, innovative solutions, moving away from the traditional win/lose results of adversarial proceedings. In the interest of business relationships, ADR resolves disputes while preserving relationships, to help, develop a positive and productive work environment. ADR is useful in a wide range of conflicts, such as commercial disputes, professional liability cases, personal injury matters, insurance problems, and family and divorce matters. This is perhaps the best possible solution that the three parties to the argument can seek to resolve their business problem (Arbitration Law). References Legal Definitions: Legal Elements of a contract, http://www.legal-definitions.com/contract-law/legal-elements-of-a-contract.htm Legal Definitions: Arbitration Law, http://www.legal-definitions.com/dispute-resolution/arbitration-law.htm Read More