The paper 'Contracting Excellence in Procurement and Supply' is a great example of a Management Case Study. This section of the report examines the creation of legal agreements and sources of law in business contracts with suppliers. Sources of express terms and impact of legal agreements on relationships, legislations of contracts were also investigated. The report also considers dispute resolution, core clauses, and recommendations for remedies to the breach of contract. 1.2 Legal issues in the formation of supply chain relationshipsBetween 2009 and 2013, Centrica British Gas, the British largest energy supplier, and five others were found to have overcharged households by £ 1.2 million (Schaps & Chestney, 2015).
Competition and Markets Authority (CMA) admitted that energy firms were acting outside the law and were exploiting consumers. The authority proposed price capping to protect consumers from high tariffs (Schaps & Chestney, 2015). In view of the above activities of suppliers in overcharging consumers, the legal aspect and implications are sought (Connor, 2010). Procurement and supply activities in organizations are governed by contracts that have a legal basis from both criminal and civil law. While criminal law covers boundaries of acceptable conduct, civil law covers areas on family matters, negligence, and contracts (Prickett, 2013).
Regarding contracts, the different countries have varied interpretation and understanding of contracts. However, a common definition has been accepted that a contract is a verbally unwritten agreement or written document, gentleman handshake, simple body language, and encoded or cryptic message (McKendrick, 2009). Jurisdictions with anti-cartel laws have contracts hidden and enforced by cartel members. However, in cases where there are industry exemptions or no anti-trust laws, contracts are enforceable in a court of law or publicized. Contracts are formed where there is an invitation to treat, offer, acceptance, consideration in monetary terms, and the intention to create legal relations (Gillies, 2004).
The process of formation of contractions between suppliers and purchasers is based on a willingness on both parties to enter into the contract. However, if the contract is misrepresented, misguided, or deceiving, then one party may sue for non-performance or frustration of the contract. In some situations, suppliers accused of overcharging are held for systematic overcharging fraud, and the agreements are terminated (Prickett, 2013).
Blecker, T. & Kersten, W. (2006). Managing Risks in Supply Chains: How to Build Reliable Collaboration in Logistics, Erich Schmidt Verlag.
Connor, J.M. (2010). Price-Fixing Overcharges 2nd Edition, Purdue University. http://emmanuelcombe.org/connor.pdf.
Gillies, P. (2004). Business Law: Remedies for breach of contract, Federation Press.
Grace, T. & Fenwick, A. (2010). The termination of contracts for Breach, London. http://www.feg.com.au/documents/TerminationpaperTRG10.10.pdf.
Hallikas, J., Karkonen, I., Pulkkinen, U., Virolainen, V.M. & Tuominen, M. (2004). Risk management processes in supplier networks, International Journal of Production Economics, 90(1): 47-58.
O’Keeffe, P. & Vanlandingham, S. (2005). Managing the risks of outsourcing: A survey of the current practices and their effectiveness, APICS, Independent Risk Consulting.
Mallett, N. (2012). Contractual remedies: the different outcomes of rescission and repudiatory breach, Lewis Silkin Press.
Marcar, N. (2015). What qualifies as fraud? When is it ‘sharp but legal’? Social housing. http://www.socialhousing.co.uk/what-qualifies-as-fraud-when-is-it-sharp-but- legal/7007980.article.
McKendrick, E. (2009). Contract Law, 8th edn, Palgrave.
Prickett, F. (2013). Terminating a contract, Clayton UTZ. http://www.claytonutz.com/publications/news/201305/01/terminating_contracts.page.
Rosettenstein, G. & Brady, S. (2013). Supplier risk management: Time to take control, Price Waterhouse Coopers.
Schaps, K. & Chestney, N. (2015). Accused of overcharging, UK energy firms could face price cap, Reuters, July 7, 2015. http://uk.reuters.com/article/2015/07/07/uk- britain-energy-competition-idUKKCN0PH0G620150707.
The National Archives, (2014). Supply of Goods and Services Act 1982, UK Government. http://www.legislation.gov.uk/ukpga/1982/29.
Waters, C.D. (2007). Supply Chain Risk Management: Vulnerability and Resilience in Logistics, Kogan Page Publishers.