Don Willetts and his wife Dana began visiting the Sunday School class you teach in New Bern, NC, about 3 months ago.

BUSI 561

DISCUSSION BOARD FORUM 2 CASE STUDY
Topic: Contracts
Don Willetts and his wife Dana began visiting the Sunday School class you teach in New Bern,
NC, about 3 months ago. Don is not a Christian, but, with the encouragement of his wife who is
a Christian, he says he is beginning to explore the faith.
After his first visit to the class, you spent some time talking with Don. You discovered that he
owns a small, local health food products business and that he is interested in growing the
business by adding some new product lines. You informed him of the high anti-oxidant qualities
of the Scuppernong grapes your family produces company sells, and you asked him if he might
be interested in promoting either the grapes themselves or the various products and pills
developed using their seeds. Don was interested, and, a few days later, you supplied him with
some samples. The samples turned out to be a very popular item with his regular customers, so
he placed a modest phone order with your company. Over time, Don placed regular, increasing
phone orders, and he began investing heavily in advertising for the Scuppernong products at his
store. Your company has faithfully delivered everything requested, promptly, and at consistent
prices. You typically sent an invoice with each delivery, requiring payment within 30 days, and,
though Don had frequently been late making payment, he had generally paid each invoice within
45 to 60 days. You had elected not to charge him any interest or penalties though your invoices
state that you reserve the right to do so.
On one occasion when your 17-year-old son, a part-time deliveryman for your company,
delivered some product to Dons store, Don handed your son a requirements contract and asked
him to sign it on behalf of your company. The contract included a guaranteed price schedule
consistent with what he had been paying. Don told him that it was just a formality to guarantee
a continuing business relationship. Your son signed the contract and gave it back to Don. Neither
Don nor your son mentioned the contract to you.
After a columnist for the New York Times wrote an article praising the anti-oxidant qualities of
Scuppernongs, the demand for Scuppernongs skyrocketed nationwide. Your company became
inundated with orders, far in excess of your ability to meet the demand. A company in
Connecticut offered to pay you twice the going rate for your products, but the company also
required you to sign an output contract as a part of the deal.
Though this contract would represent a substantial financial windfall for your company, you felt
bad about potentially leaving Don out to dry. You called Don, advised him of the offer you had
received, and, to try and soften the blow, you suggested to him the names of other reputable
potential suppliers in the area.
To your surprise, Don became very angry and told you that he expected you to continue to
supply him with all the product he needed, when he needed it, and at the prices he had always
paid per the requirements contract between your businesses as well as in accord with an implied
duty of good faith and fair dealing that had evolved based on your ongoing business relationship.
When you asked what requirements contract he was talking about, he faxed you a copy of the
contract that had been signed by your son.
Your assignment:
Looking at the situation from both a legal and spiritual perspective:
1. What should you do about continuing to do business with Don?
2. If you elect to stop doing business with Don, what legal causes of action might he
bring against your company, what damages or remedies might he seek, and what legal
defenses might your company have?