Scenario I
This is a case of Best and Discount. Apparently, Best and Discount had an agreement in the form of a contract wherein the former was to be supplied by the latter with clusters of goods, for the entire year, each cluster of which was worth at least 1,750 USD. In the end, Discount failed to adhere to the terms of the agreement. Best filed charges against Discount. In its defense, Discount explained that the plaintiff’s complaint cannot be qualified legally as a breach of contract because number one, the document that Discount’s employee, Robert, who signed the contract with Best, signed was merely a Standard Supply Contract and so Discount, as a whole, or any of its legal representative, was not present when the alleged contract was signed; and number two, because Robert, a regular employee at Discount, does not have any legal power, or authority, to sign a standard supply contract.
The first question that needs to be answered in this case would be if there was a contract. Based on the recount of events, there was no official contract because the person who negotiated the contract, Robert, was not authorized to do so and neither the owner nor any legal representative of Discount was present when the contract was signed. Additionally, the alleged contract that was signed was merely a Standard Supply Contract. In this case, Discount should at least be legally liable when it comes to the issue of releasing contracts that are not duly signed by authorized persons in their branches.
If best would file a lawsuit against Discount targeting this issue, then there is a good chance that he will win. In this case however, it can be objectively ascertained that no official contract exists. Best’s oral testimony under oath can simply be used to testify that Robert, the employee, agreed to the terms of the Standard Supply Contract even if he and the Discount management knows that he, Robert, is not authorized to do so. There is a good chance that the charges will be dismissed by the court under the basis that no official contract exists. Best’s lawyer however, has the option to recommend to Best that he file a separate lawsuit against Discount for allowing unauthorized persons to sign contracts, which are legal documents.
Scenario II
Martin claims that Reliable Construction breached certain aspects of the house construction agreement they are both a party in after Reliable Construction failed to complete the construction within the 7 month period and illegally, as no grounds for subcontracting was established in the agreement, subcontracting Sun Construction to finish the already delayed construction project. Additionally, Sun’s work was not only delivered late but was also defective. In most cases, main contractors, which in this case, Reliable, indeed reserve the rights to delegate a portion of the work to subcontractors unless otherwise specified in the formal agreement .
This, unfortunately, is the only defense that Reliable can use against Martin’s claims. Even if Reliable would be able to get away with the legality of subcontracting successfully, the company still has two issues that they need to address: their failure to finish their part of the contract within the specified and agreed upon 7 month period, and the substandard quality of the construction output. It is almost certain that Martin will win the case against Reliable. The two involved parties may be able to arrive at an agreement and settle with Reliable having the obligation to compensate Martin for the waste of time and resources, depending on Martin and his lawyer’s demands.
References
Smith, E. (2005). Introduction to Business Law. Pearson Publishing.
