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111111111111COMMERCIAL MANAGEMENT IN PROJECTS

CONTRACT AND AGENCY

Following are each of the scenarios with:

A short report to the line-manger:

Discussing the issues which arose from each of the following problems (including offer, acceptance, error, misrepresentation and agency);

Discussing potential remedies and outcomes

PART 1

SCENARIO 1

SHORT REPORT TO THE LINE MANAGER

In the first scenario an invitation to treat to the general public was made by Caledonia limited through the advertisement of a “special offer”. A certain good or service displayed at a fixed price online, in a trade journal or in a shop are considered invitations to treat rather than offers (Beale H.

G..,2004).The initial offer was made by the junior buyer of the Camco responding to the special offer , confirming the discounted price. The offer was then validly communicated over the telephone with essential details provided such as the product, price and other details making it an express agency

The offer was then accepted by the junior provide the updated billing details during which the line from camco’s side went dead.

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The junior rep could not conclude the action that implied their acceptance and therefore the contract could not be completed.

Seeing the circumstances and willing to go ahead with the offer, Caledonian made a second offer with time limit i.e. this offer would only be valid until next day, However camCo’s rep did not call back which resulted in an end of the contract. To which the Head of Sales then decided to withdraw the contract and sent an email with effect to the information.

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CamCo then contacted to inform that they had paid $150,000 and considered the deal concluded.

The error was mutual when the line got disconnected while updating the billing information which led to further miscommunication between both the parties…

This can be proven by the facts stating in the scenario when Caledonian company didn’t

Get in with the CamCo for further information before cancelling the contract and also when Camco didn’t immediately inform the Seller about his payments updates.

Lack of communication from Cameron Company during the call and post the payment creates a misinterpretation causing the contract to be void for a certain time .Leading it to several consequences and drawbacks to the Camco

POTENTIAL REMEDIES:

According to the situation, assuming being the head of sales of Caledonian… and Cameron Company being one of our most trusted and oldest client There would be meetings scheduled for both parties to let the offer be accepted by making a new agreement and accepting their offer for the discounted price and also providing them a service for the software for the coming 6 months, Which would help us maintain a relationship with the firm for the coming future

POTENTIAL OUTCOME:

According to the implied solution the potential outcome would be:

A better relationship with the client

  • Further risk management on such situations
  • Avoiding the damage of the Firm’s reputation

PART 1

SCENARIO 2

SHORT REPORT TO THE LINE MANAGER

In the second scenario CamoCo claims a fraud with its previous instalments of the software by Caledonian. According to CamCo there was an offer made by the Caledonian sales Rep who was given an express authority failed to communicate to the client about minor bug defect in the software.

Later, there was another offer made for the second software by the same sales rep regarding the faulty software but still making it a valid offer making it a fraudulent misrepresentation by hiding some important facts.

While making the third deal for a software for the Camco. There was a “Careless Misrepresentation” made by another sales rep who mentioned that this software was of a higher specification than the previous generation of the same package. In fact, its specification was slightly less and it crashed within one week of installation which has resulted in Caledonian’s reputation at stake .

Now the CamCo holds an explanation from the Caledonian regarding the faults and states a breach of a void contract and refuses to pay for the fourth software which was already purchased and in use from Sept’19.

In the above situation

An offer is where one party is ready to do business with other party Adams & Alix (2016) Law for business students. Which proves that CamCo and Caledonian had come into a valid contract as there was an offer made and accepted for each of the software’s ending in the month of July 2019.

But there has been a breach of contract from the Caledonian company, Also the liquidated damage clause of 200% cannot be enforced as it can be treated as a penalty

REMEDIES & OUTCOMES

Since all the three contracts were breached by Caledonian, some of the suggested remedies are:

The contract can be voidable for a certain period of time until the desired rights of the party (Cameron Company) are fulfilled

The possible outcomes by applying this remedy could be a better relationship in between two of the company’s

PART 1

SCENARIO 3

SHORT REPORT TO THE LINE MANAGER

In The third scenario Jennifer the head of sales of Caledonian asked Simon to buy 6 apple desktop’s for the development of the company on Caledonians behalf giving him an express authority to which Simon made an offer of 20,000 pounds for 6 desktops. To which Jennifer agreed and came into a contract with Simon by paying him cash in advance. Simon then carries out an implied authority to Rita on strict instructions to only spend 15,000 for the desktops, to which Rita returns with new walsh PC computer which were redundant for at least a year and were an ex display model and handed it over to Simon.

Simon causing a breach of contract explained Jenifer that the computers had superficial markings due to the transit from the PC factory. This is where Simon has committed a fraudent misrepresentation.

Later that evening due to alcohol overdose Simon spurts out about the financial problems and the cash flow difficulties to the accountant who is now after Caledonian for further information. Which is again a careless misrepresentation which is “untrue statement made with reasonable belief or carelessly Adam & Alix (2016) to which later Simon later confesses to Jennifer about his blurting out while delivering the PC’s

REMEDIES & OUTCOMES

As per hearing of case Armstrong vs Jackson (1917) if the agent had failed to avoid conflict of interest, the agent must pay interest and profit made from the sales. As Caledonia being the principal needs to obtain the profit of sale from Simon.

The contract not can stand still that is voidable for fraud from Simon

PART 2

NEGOTITATION

OBJECTIVE OF THE MEETING

  • To seize the opportunity and crack the deal for the 5 new software related project with addition of 2 more projects in the coming financial year
  • Negotiate for a reasonable deal but with keeping in mind the importance of the deal
  • To gather good amount of information of Camco and its requirements to have faster solutions at the discussions
  • Convincing Camco to let the contract be governed by the law of Scotland and also that the intellectual property of software cannot be owned by them
  • To maintain a good relationship with the client by making reasonable offers so that it directly affects the image of the company in the market.

PROPOSAL OF THE MEETING (NEGOTIATION STRATEGY)

Camacho being one of our crucial and most loyal clients, despite the unfortunate recent contractual problems they have still made us an offer for 5 new software’s with new further orders in the coming financial quarter.

According to which I believe there should be a Co-operative negotiation to balance the work- relationship with the client

During the discussion the head of buying of Camco is yet to discuss the quality and price of the software in comparison to the French competitors and make a negotiation with affect and demand a reduce in price as stated in the heads of terms. As representation Caledonia there is a need to justify the extra costs, features and specifications of our product with the comparison of the market features and price

The head of busying being a well-known negotiator it is very important for us to put our points forward keeping their needs in mind such as guarantee and discounts as it is a very important deal for Caledonia

We also need to make a strong point that our contract would be governed by the law of Scotland and not England if not agreed we could negotiate this with an offer to Camco with interest to owning the intellectual property in the software.

PART 3

BUSINESS VEHICLES

Three possible suggested Business vehicles are:

Sole Trader

Limited Liability Partnership

Limited Company

The above are the 3 vehicles which could be chosen for Mr Mrs Murray as they are planning on a tennis academy

Advantages of Sole Traders

  • Sole propertiership gives you the choice of owning and have complete control over the business
  • Mr&Mrs Murray need not share any profit and own all the assets
  • Being new to the Business world it would be one of the easy and reasonable investment
  • Information about the sole traders are kept secret unlike that of limited companies which are made necessarily made public
  • Decision making is solely in the hands of the couple
  • Simple and easy way to set up the initial business as there is in need to register with company’s house and can save some amount on registration
  • The accounting process is much simpler than for the limited company with no need for formal annual accounts
  • As Mr&Mrs Murray would need different machinery and tools for the tennis academy would be able to claim capital expenses
  • Being a sole trader if in future would choose to form a limited company from a sole trader it would take a longer and a formal process

Disadvantages of Sole Trader

Sole trader business are a separate entity which means the liabilities and debts of the company are of the sole traders , so if the company falls into debts the sole trader will have to lose his income and will have to pay the money you owe from your assets

There is a lack of prestige as the perception of public on sole traders are quite small and less professional credibility which lead might lead the market away

Linked to the prestige and fact that the sole traders are seen at higher risk many clients would be drawn towards limited company

There is limited access to finance being the only owner of the business and having no transparency of accounts which may also lead to not able to share their securities in exchange for investment

Poor life-work balance due to being the only owner of the business and the sole decision maker it gets too much on the plate for the owner to maintain a balance and focus on many other things which might lead to downfall if the firm at a certain pint of time

TAX IMPLICATIONS

Must pay tax on business profits

  • Currently required to pay Class 2 and 4 national insurance and income tax on all taxable business profits
  • A sole trader can withdraw his Finances without any tax payments
  • Monetary gain is gained while selling or buying goods

LIMITED LIABILITY PARTNERSHIP

ADVANTAGES

  • As it is run by two or more people the liability is shared
  • The partnership so not liable to [pay taxes and can pay taxes like personal ,sell employment
  • There is no limit of partners as any number of partners can be involved in the business
  • It is flexible in nature , the partners are allowed to decide third percentage of their partnership and also own the freedom of quitting the partnership at any point of time

It is a separate legal entity thus lip earns more respect compared to other business vehicles.

DISADVANTAGES

Unlike general partnership , LLP is not recognised as legal entities in every state

LLP existing in some states are imposed with High tax limits on the entity both while formed and ongoing

Another major disadvantage is that one partner can make his own decisions and not obliged to consult the partners in certain LLP agreements

There are special tax considerations because of the special structure of LLP and tax filing requirements which in some states recognise the structures as non-partnership for tax purposes this could result in disadvantages of the patterns who require tax exemptions

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111111111111COMMERCIAL MANAGEMENT IN PROJECTS. (2019, Dec 07). Retrieved from http://studymoose.com/111111111111commercial-management-in-projects-example-essay

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