Question

Stan owned PureHands, a business that sold hand sanitizer. He knew that two local hotels had just installed a large number of hand sanitizing stations and were buying all of their hand sanitizer from his competitor, GermAway. Stan went to the Hotel Aja, and asked the Purchasing Director if she would consider buying the hotel’s hand sanitizer from him. The director said that she could not do it, because she was bound by a three-year contract to buy all hand sanitizer exclusively from GermAway. Stan offered to sell the hand sanitizer for 15% less than GermAway’s price if the director would buy from PureHands instead of GermAway. The Hotel Aja Purchasing Director then agreed to stop accepting and paying for shipments of hand sanitizer from GermAway. and to start buying from PureHands. Stan and the director immediately wrote and signed a contract to this effect. Stan then went to Hotel Gaucho, and asked the Purchasing Manager if he would buy the hotel’s hand sanitizer from PureHands. The manager told Stan he had been looking for a more competitive price for hand sanitizer, and told Stan the price he was paying with GermAway. Stan said he could sell his hand sanitizer for 10% less, and then the manager agreed to switch to PureHands as Hotel Gaucho’s supplier of hand sanitizer. Stan and the manager immediately wrote and signed a contract to this effect.

Use the IRAC method to analyze the likely outcome of any TORTS lawsuits that could arise from the above case problem.

Answer 1

IRAC stands for Issue, Rule, Application and Conclusion. It usually functions using legal applications.

1. Issue: In the IRAC method the word "issue" is a legal question for which an anwer is needed. In our case :

* "Why did Hotel aja dishonour the three year contract it had with Germaway regarding the sanitisers?"

* "Why did the Purchasing Director enter into another agreement without any consultation?"

In the case two Stan and Hotel Gaucho:

" Why did Stan agree to sell the sanitiser at 10% when he had agreed to sell it for 15% to Hotel Aja?"

After Issue the next step is Rule. Here we have to analyse the issued question in accordance to the law having a legal interface..Here a detailed analysis are made .

As per our case in our first issue

The answer may have many supportive allegations but as per law when

• " a Contract or an agreement is made between two parties when the offer made is lawfully accepted and considered by both the parties.    
• the agreement is made to create  legal relationship between them. for eg. if I pomise a friend to accompany her to the mall and if I fail to do so , she cannot sue me as there is no legal obigation.
• When a contract is made there is a consent between both the parties wherein in one party agrees to buy the goods or services which the other party agrees to provide.
• Once a contract has been signed both the parties are legally binded to fullfill the contract failure to do so can give rise to criminal or monetrary penality as the case may be

When the Purchasing Director had signed the three year contract with Germaway all these points were well acknowledged by Hotel Aja and was also well know by the Director.   

Our Second issue in our case study:-

In an organisation or company decisons are taken by the Board especially when the company has already entered in a contract , whether it relates to terminating or continuing the contract. The Purchasing Director of Hotel Aja directly entered into another contract without any prio intimation. Which in legal terms is illegal or considered as fraudelent act.

Our third issue in our case study ;-

Stan had a already selling his santizers for 15% less them Germway which was his competitor to hotel Aja but agreed to sell 10% less to Hotel Gaucho. As per market researches a standard price has been set up in accordance to which the products have to be sold in that margin. Here Stan sells his sanitisers at a more lesser margin the reasons can be many again.

1. Stan wanted to be sole distributor and capture the market.

2. Create monoply.

3. Personal conflicts... lets not discuss that.

The third step -APPLICATION : this is a very important part wherin allthe aspects with due consideration has to be done.

After issuing and studing the rules in accordance with our case study let us see its applicability.

In our case ther has been a breach of contract by Hotel Aja to Germaway. As per law even if a contract is to be terminated a prio notice has to issued to the other party as to the reasons for terminating the contract. A contract cannot be terminated suddendly. Secondly the reasons as to why the Purchasing Director entered into the contract   without consutation should also be considered. May be The puchasing Director had taken this decision taking into the consideration the cost cutting policy, or product not up to the required standard . But there should be valid proof to support the purchasing Manager decision.

Lastly conslusion which may vary as perpective:

Using the IRAC method in our case study they may be Tort lawsuits that can arise .

Tort is something that has caused harm or loss to to the claimant arising from a legal liability. even if it is caused due to negligence it is an offence. the victim can recover its losses from the party causing this offence.

1. As per law Hotel Aja had under one a breach of contract with Germaway therefore the claimant germaway can file a suit under Tort Law and demand for compensation for the losses it has incurred due o non complaince of contract period.

2. The Board can also sue the Purchasing Director of Hotel Aja as for positioning the status of the Hotel in the market

3 As per Trout Law suit can also be filed by germaway on Mr. Stan as for selling the product at a lower margin as prescribed by the market standards or trying to create monoply in the maarket..

As per our case study the Manager of Hotel Gaucho was fully aware that his Hotel was not bound with any contract and was in search of a company selling sanitisers at lower price as compared to germaway. There is no legal bind on Hotel Gaucho which can stop it from entering into a contract with Stan. So there can be no lawsuits with respect to Hotel gaucho.

As Stan was the owner of Pure hands santizer he can show valid proofs that his sanitiser can be produced at such a lower margin and hecan bear the cost.