Case Study
Advise Jim and Neal, the farmer and the store owners as to what you think will happen.
You must read the following case study and provide and advice to the person requesting the information. You will need to identify all of the legal elements to the case, provide advice about what you think each party should do and come to a conclusion about what the outcome will be.
Marks 10
Spelling and Grammar 1
Identifying legal elements 3
Content/argument 5
Decision on outcome 1
Case Study
Jim was a well-known business man in Kamloops. He recently retired from his job and decided he wanted to start a business with his neighbour. Jim had a sweet tooth and decided to start an ice cream distribution company. Jim’s neighbour, Neal, had a connection with a local farmer who produced his own ice cream and several other farmers in the area who were also producing ice cream. Neal did not really have any money as he has never been good a managing cash. Jim was going to fund the operation and Neal was going to make the connections with the farmers.
The plan was to take all of these small farmers and act as an intermediary between the farmers and retailers. Once they has set up contracts on behalf of the farmers they would then deliver the ice cream.
Their idea was a huge success and within two months they had 15 farmers who wanted to distribute their products through Jim and Neal’s business. Neal was very excited as he had never been good at business and this was the first time he felt successful. In his excitement Neal told all of the farmers that the store owners wanted triple the amount of ice cream next month.
Jim had actually been dealing with all of the orders for the stores and it turned out that only one store wanted extra ice cream next month and they only wanted the extra from one farmer not all of them. When Neal went to do the pick-ups and deliveries for the next month all of the farmers provided him with the extra ice cream he had told them the stores wanted. On the way to drop off the ice cream Jim though they had extra ice cream as the truck looked really full however he did not say anything.
When they arrived at the stores, all of the stores except one refuse to take the extra ice cream. Jim became quite worried about the extra ice cream and told Neal to take it back to all of the farms. When he tried to return the ice cream all of the farms refused to take it back. They all said Neal had made the mistake and it was his responsibility to deal with the ice cream.
Since Jim and Neal did not have the facility to store the ice cream most of it went bad before they were able to deal with it. The famers are now demanding payment for the ice cream and will not give Jim and Neal any further ice cream until they get paid. The stores have also started calling Jim and Neal asking where the ice cream is as they are in the busy part of the summer and do not have any ice cream.
Case Study
In the formation of the business, Jim and Neal had a partnership agreement whereby Jim was funding the operation while Neal was to make the connection with farmers ensuring that their business acted as an intermediary between the small scale farmers and retailers. However, in the process of the business, Neal who was excited about the success of the business requested farmers to triple their ice-creams supply resulting without consulting with his partners or the stores. Only one store accepted the extra ice cream, which left the business with extra ice cream that went bad after farmers refused to take back. The breach of contract between business partners is the main idea that is identified in the case study since Neal did not consult with Jim upon ordering extra ice cream from framers. Despite lack of consultation, Neal makes the decision based on one store request of extra ice cream assuming that other stores will also accept the extra ice cream. With farmers having refused to supply ice cream to Jim and Neal’s business due to pending payment of the extra ice cream supplied, and with the high demand of ice cream by stores due to the busy part of the summer, the two partners have to find a quick solution to salvage their business.
The recommended settlement between the partners would be for Neal to take full responsibility for losses incurred in extra ice cream that went bad. The settlement s base on the fact that the decision to request extra ice cream from farmers was made only be Neal, which does not give the possibility of splitting the losses incurred between the two partners. Jim and Neal’s business can negotiate with stores to pay in advance giving them enough money to pay settle the farmers’ pending payments and get supplied with ice cream (Huntington, 2019). However, the agreement that would see Neal refund the damage in an installment way would ensure the business remains operational and the partnership between the two intact.
References
Huntington, M. (2019). Breach of Partnership Agreement. AZ Central. Retrieved from https://yourbusiness.azcentral.com/breach-partnership-agreement-24472.html
