Question

Are Wal-Mart's standards illusory if it does not consistently enforce them against foreign suppliers? Does Wal-Mart owe a duty to require that it's foreign suppliers provide the same protections to their workers as is provided to workers in the United States?

Answer 1

Case summary:

Company W owns and operates a large discount department and the warehouse stores in Country U. It developed a code of conduct for their foreign suppliers. The standard explains that the suppliers should adhere to the local law and working conditions. It also states that Company W can terminate any contract at any time if they fail to comply with the standards.

Workers from other countries sued Company W. They stated that they were the third party beneficiaries to the contract of Company W with foreign suppliers. In addition to that, they also stated that their employers were violating the standard. Company W failed to investigate the working conditions of the foreign suppliers. However, Court dismissed the case.

Determine whether the standard of Company W is illusory if they did not enforce the foreign suppliers to use that:

Person X would like to mention that the standard of Company W is illusory if they did not constantly enforce the foreign suppliers to adhere to the standards. Suppliers will prefer to work in their working condition rather than following the local working condition. Thus, if Company W did not enforce them, they will start using their law and working conditions.

Determine whether foreign suppliers should protect the workers as workers are protected in Country U:

Foreign suppliers are not owe this duty to protect their workers as Company W protecting their workers in Country U. However, as the employers they are liable to protect their workers. It is not necessary to protect in the way Company W protects.

Conclusion:

Third party beneficiaries are those who have the right to sue on the contract. However, they are not originally an active party in the contract.