Question

Subject: Business Law

George Company Limited (GCL) is desirous of purchasing ventilator machines to enhance its operations of its employee’s medical service company, due to the increase of the Covid 19 related illnesses in Trinidad. The Operation Manager of GCL has located an ideal ventilator machine in China from Wuhan Machine Services Limited (WMSL). GCL has dealt with WMSL over the last 10 years on several business matters, but never with respect to ventilator machines. Mr. Noitall from GCL, developed specifications of the ventilator which they required and emailed it to WMSL. WMSL submitted an offer to GCL which consist amongst other information the following,” the ventilator will be of the same type submitted to other companies in Trinidad and Tobago” It also included information on price, freight on Board etc. GCL accepted WMSL’s offer via official letter dated the 3rd March 2020. Mr. Noitall on a subsequent visit to Jetson Incorporated saw that they had the same ventilators that GCL ordered from WMSL and requested from Jetson’s management to take a closer observation at its engineering capabilities. However, to his amazement, it was of a very poor standard and he subsequently reported that fact, to his executive management. GCL immediately decided via email to inform WMSL that they are no longer interested in purchasing the ventilator machines. WMSL responded shortly thereafter to GCL’s email and advised GCL that they had a valid agreement with WMSL and they will treat any decision by GCL not to proceed with the transaction as a breach of contract. Kindly advise GCL whether or not they can avoid this agreement Please use the IRAC( Issue, Rule, Analysis, Conclusion) method when giving the answe

Answer 1

GCL has to think about the contract and the product quality which it is going to get from the WMSL. so already their quality has been checked and reviewed by other customers. Now we are going to analyze this with the IRAC perspective.

Issue: Here the issue is purchasing of the ventilator by GCL from WMSL. The quality showed and the real performance quality of that product is not up to level. so if they cancel the order the WMSLwill sue the GCL on the breach of contract.

Rule: the breach of the contract says that If you deal with another company with volumes of agreements then there is a chance for an agreement doesn’t deliver on the terms agreed to by all parties. So here, in this case, GCL is having a relationship with WMSL from the past 10 years, so this contract cancellation may drag it to the legal platform of breach of contract.

Analysis: Here GCL needs to be very though full while documenting their contract. Now each and every word in the contract will define the terms of the contract. if the contract has been documented cleverly then the company may be in a non-loss zone. here GCL needs to find out all the points and past contracts and study thoroughly to reach a middle path so that they can be saved from the legal notice. All the employees involved in this process may add the point to the documentation.

Conclusion: A thorough analysis and cleaver documentation and proper use of word may save the company to fce teh legal attack by WMSL. Aso if not the full brench it can be reduce to the minor brench of contract so that the company should not face any kind of heavy loss.