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Write a contract based upon the following fact pattern.
You are a business manager of a small medium-sized corporation. Due to the fact that this is a small medium-sized corporation, you have to wear many hats. These hats include but are not limited to the human resources function but also the office management and supervision within the entity. The name of your company is Carolina Manufacturing and Design, Inc., referred to as Carolina. Carolina makes various fabricated steel and other home products. Your company has been a relatively small company originally started back in the early 80’s when the President of the company could not make it as a football player in the NFL. He feels that if the Carolina Panthers would have been in existence in the 80’s he would have been able to play in the NFL and in fact probably would have been able to retire as a Hall of Fame candidate at the very least. However, due to the Jerry Rice’s of the world he could not latch on to an NFL team.
Your position within the company is to finalize the agreement that the sales force has entered into with one of the company’s customers.
Your company’s top sales person has just “closed” the sale of the year for your company. Your top sales person is known as “Top-dog Tom” because he has a knack of “telling it like it is.” It’s been said that he could sell a Popsicle to an Eskimo. He is a legend in the manufacturing and design business. At least Tom thinks he is. Tom brags about being a legend in his own mind. This sale will allow your company for the first time to ship its products into Mexico after all, this is where the home office of El-Bubba’s Home Designs, Inc. is located. In fact, El-Bubba’s Home Designs, main distribution plant is located in the wonderful city of Savannah Georgia.
Your company has agreed to sell 10,000 winglets. The price of these winglets normally goes for $9.00 each but your top sales man has stated that Carolina would sell them for the mere price of only $6.00 each. Carolina knows it makes a quality product and has a reputation for timely completion of all orders. This is probably one of the reasons why Carolina got this order because everyone knows that you can’t complete a home manufacturing project without at least 5 winglets. It doesn’t matter whether this is a commercial home improvement project or a project for the average do-it yourselfer, you will need at least 5 winglets to finish the job. Carolina is concerned with the North Korean situation and if war were to actually happen and be prolonged, there might be a disruption in getting the materials needed from Zimboau the Country that provides the raw materials to Carolina so they can make their winglets. Your boss knows that if there was a disruption in the supply chain they might not be able to deliver the finished product to El-Bubba’s on a timely manner.
Top-dog has told Bubba’s people that since they are getting a great price Bubba’s will cover the cost of getting the winglets to their main distribution plant and that they, Bubba’s will have to agree to buy these winglets from Carolina for a period of no less than five years with the right to continue to do business in the future. Your company is only one of the few companies in the country that makes these winglets. After months of negotiations for these high-end items both parties feel that they are getting the winglets at a great price. Your company is excited about this sale because this is the first time, let alone for this duration, that they have ever had an order of this size. Additionally, Carolina is concerned because, instead of the traditional one-time order, and as your president has said many times in the past, “We turn’em and burn’em,” the order is for a five-year period with 10,000 winglets to be delivered once a year beginning with the first order to be shipped on September 1st 2017.
Your company is concerned about being paid for this order because in the past Top-dog has found rather poor-quality customers and the orders have been fulfilled but actually receiving the final payment from the customer was another thing. In fact, Top-dog has been counseled in the past about the things he has said to put the company on the hook. Fortunately, this time, as Top-dog bragged about how he closed this sale to everyone at the company stating that the closing technique he used was to tell Bubba’s that the payment for each shipment would be as follows, he has been quoted as saying that the payment can be made, “Annually, Once a year, or once every 12 months” prior to shipment. Top-dog has learned his lesson from the last time, because the last customer that Top-dog closed, wrote bad checks to everyone and his brother. Your company has run the credit of El-Bubba’s and it turns out to be pretty good, but Carolina is concerned that if the home design business turns downward, El-Bubba might just cancel the contract in a later year. Your boss has asked you if there is anything that can be done about this because after all, your boss wants to make sure that the flow (cash flow) of money keeps coming in.
As previously mentioned, Carolina management is concerned about this order because it has never had an order of this size or in a different country. Assuming that the contracts are finalized, Carolina will have to expand operations and even hire an assistant for you. You know the kind of assistant that gets you coffee, answers your phone, picks-up your dry-cleaning, and above all screens your calls and orders flowers and other assorted gifts for your loved ones for those special occasions so you look like a hero. Your boss has even told you that you get to pick the assistant this time instead of having to go through a hiring committee.
Your boss has asked you to write a contract for Top-dog to take to El-Bubba’s and have it signed. This contract has to be done by July 23, 2017 so that it can be given to Top-dog to take to El-Bubba and be signed so that production can get started and your assistant can be hired.







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