Question

Scenario 1 – Contracts

Greg, a consumer in Tennessee, sent a purchase order to Campbell Manufacturing, a U.S. company, for a 4000 PSI gas pressure washer valued at $1275. Greg needed a new pressure washer for his part time business of washing houses. The order did not specify how disputes between the parties would be settled. Campbell returned a definite, unconditional acceptance that contained one additional term which stated that disputes must be submitted to arbitration. Greg received the acceptance; however, he never agreed or objected to the additional term.

Campbell orally contracted to sell 15 pressure washers to London Painting Company a large commercial painting company in France.

Explain the status of the contract between Greg and Campbell.

If a contract was formed, did the additional term in the acceptance become part of the contract?

Is the contract between Campbell and London legally enforceable? (Additional research outside of the textbook may be necessary).

Answer 1

1.contract between greg and campbell is legal

2.yes the additional term in the acceptance become part of the contract.because he never agreed or objected to the additional term. no objection counted to be accepted..

3.An oral contract is just as valid as a written agreement. The main problem with oral contracts is proving its existence or the terms.it cannot be enforceable unless you have additional information to prove.

Arbitration is a process that involves both parties meeting with a qualified arbitrator who functions similarly to a judge in at courtroom by deciding which party’s argument and the case has more merit and should prevail.

This process can be either binding or non-binding, depending on the language of the agreement.

Binding arbitration means that whatever decision the arbitrator makes is considered final.

Non-binding arbitration allows either party to take the case to an actual courtroom if the outcome is unsatisfactory to the parties involved.

Businesses generally include this type of clause in contracts when they don’t want to open themselves up to time-consuming and drawn out lawsuits in the event of a dispute with a customer or client.

If you wish to keep more control over how disputes are handled, consider including this clause in your Terms and Conditions. Weigh the advantages and disadvantages for both you and your customers before including this clause.

Advantages and disadvantages

Advantages

Why do businesses choose arbitration over conventional litigation? There are a number of advantages.

Faster Resolution

The main advantage is that it is much faster than litigation.

Scheduling an immediate session with an arbitrator is much easier than getting an early hearing date set. Rescheduling is also easier done with an arbitrator than with courts.

Specialized Decisions

If your case involves a technical concept or a specialized industry, such as patents or engineering issues, arbitration allows you to choose an arbitrator with specialized knowledge of that concept or industry.

This can be advantageous for parties rather than dealing with a judge who potentially has no knowledge or experience with that industry.

Disadvantages

Arbitration does have some key disadvantages that you should know about before utilizing it.

No Appeals

Unlike a typical court trial, appeals are not allowed in arbitration cases unless it is proven that the arbitrator was biased or that his or her opinion violated public policy.

This finality can be unattractive to some who want to keep options open and have the ability to appeal a decision.

Very Costly

Arbitration tends to be far more financially costly than litigation.

An arbitrator is paid privately by the parties involved (you as a business and the user), and this cost can easily be in the thousands of dollars.

You are paying for convenience, flexibility in scheduling, and getting to choose traits of your arbitrator rather than getting a random judge.

You Lose Your Right to Sue

If you’re a disgruntled customer or client to a business that has an arbitration clause in their Terms and Conditions and you agree to this agreement, you can no longer sue or join a class action lawsuit against the business.

As a user who agreed to this agreement, you are forced to take all legal recourse issues through an arbitration hearing. This loss of freedom of choice can be frustrating for individuals who wish to sue rather than arbitrate.