Running head: MEDIATION MEMORANDUM1
TO: Alexis Fairchild
FROM: Marshall Petersen
DATE: 8th February 2016
SUBJECT: Mediation Memorandum
Here are the facts of the case
It is a fact that we, Marshall Petersen, and the grape farmer, entered into an implied contract that
was based on mutual understanding and respect. The implied contract exists only if any
reasonable person would come to a conclusion that two parties had an understanding even if
there is nothing that is written down (Statsky, 2004). We did not write down any agreements with
the farmer, but he has been supplying his produce and I have been paying him for the deliveries.
Although some payments have been late, the company has never failed to make payments for
any delivery that was received. We have had a professional business relationship and he has been
a good business supplier for the period that we have worked together. In order to maintain the
trust and mutual respect, my company makes regular payments for the supplies received .
Despite the fact that we enjoyed a healthy business relationship, the grape producer recently
informed me that he has found another company that offered him a better price. As a result, he
wants to terminate the supply of his products to my company. The decision by the grape farmer
will have a devastating impact on my business. This is mainly because my business has heavily
invested in advertising and as a result, the company has been able to create awareness, which has
resulted in increased demand for the products. It is through the efforts of the company that the
farmer now gets more demand that exceeds supply. In addition, the promotional drive a a costly
process, and if the farmer fails to deliver as per our initial contract, the company would be
plunged into financial uncertainty.
MEDIATION MEMORANDUM 2
It is important to note that I entered into a contract with the son of the farmer since he has been
supplying the company with the products. However, I did not know at the time that the son had
not attained the legal age because he is one of the part time employees of the company and as the
law requires, people who are not of legal age should not be employed. With this decision to
terminate the business relationship that has been successful is unjust and unethical.
Should the farmer decide to terminate the business relationship that we have had, the
company will face difficulties which will include but not limited to the following:
Operational disruption
Financial setbacks
Damages for breach of contract
Therefore, I have decided to file a case so that this issue is resolved in an amicable manner. The
grape farmer is a Christian and I hope Christian values will prevail in his judgement.
Contract at Issue
I entered into a contract with the son of the supplier because I thought that he was of legal age.
This is mainly because he is a part time employee of the farmer and as the law stipulates, a
person who has not attained a legal age should not be employed. Therefore, my assumption that
the son was of a legal age is valid. Since there is no contract that was entered between the farmer
and I, the company decided to enter into a contract with the company of the farmer because it
would enable the company to update its records of the suppliers. This information was needed
and being a representative of the company, the son agreed to enter into the contract therefore
binding the business relationship that the farmer and I have had for some time.
The contract that was entered on and behalf of the farmer's company by the son is legal and
binding. This contract specifies the guaranteed price schedule consistent with what the company
MEDIATION MEMORANDUM 3
had been paying for the deliveries. According to McKendrick (2015), the decision by the farmer
to discontinue supplying his products to the company amounts to a breach of contract and
therefore gives the company the right to sue for damages as a result of the breach. This is mainly
due to the fact that the decision that the farmer has opted to take amounts to a material breach
which is a serious offense and it gives me the right to sue the farmer for damages.
Legal issues
The contract the son of the farmer entered on behalf of the farmer’s company created certain
obligations that have to be fulfilled by the supplier (Schmidt-Kessel & Silkens, 2015). Failure to
perform in accordance with the contract agreement amounts to a breach. Therefore, since the
farmer has decided that we use an alternative way to resolve this issue, I would expect that he
keeps his part of the deal.
Requested remedies
Since the farmer is a Christian, Christian values and virtues should prevail. I am not proposing
that I take advantage of his Christianity, but he should be able to honor his part of the business
relationship. Should the mediator find that the contract that was entered into by the son of the
farmer is null and void since he had no contractual capacity, the farmer should offer a reasonable
price for his produce. This is mainly because the two companies have had a good business
relationship that has seen the two companies prosper as a result of the marketing efforts of my
company.
It will not be acceptable for the farmer to decide to terminate his services without regard to the
effects that his decision will have on my business. Therefore, I am willing and able to negotiate
with the farmer so that the good business relationship that we have had continues to prosper.
Conditions under which settlement may be achieved
MEDIATION MEMORANDUM 4
Should we come to an agreement, the farmer must ensure that he supplies the business with the
products at all times and payments shall be done on time. The prices that have been proposed by
the farmer should be negotiated so that a mutual price for the two companies can be attained in
an amicable manner.
Should the farmer decide that he will not honor his part of the deal, I will sue his company for
damages due to the serious nature of the effects that my company will get as a result of the
decision to terminate the business relationship that the two companies have had.
I am willing to renegotiate the if the farmer feels that the price I have offered him in the past is
low. This is mainly because I want to continue the good business relationship that we have had
over the years.
References
McKendrick, E. (2015). Contract Law. United Kingdom: Palgrave Macmillan.
Schmidt-Kessel, M., & Silkens, E. (2015). Breach of Contract. In European Perspectives on the
Common European Sales Law (pp. 111-135). Springer International Publishing.
