1 What are the key facts for sellers perspective?

2 State the goal clearly what the promisor trying to achieve?

3 State clearly how the breach took place and explain?

4 Should the damaged party be compensated for their losses, if any? Explain how?

5 Provide details of what the other party could have done to mitigate the problem?

6 Review the facts and state a position on how you might solve the problem?

7 Negotiate your action plan with the other group trying to resolve the situation?

Louise Moffat, packaging buyer for Earl’s Candies, was wondering what to do with Longmore Packaging on an order of misprinted boxes. Jim Shaw, sales representative for Longmore, would be in Louise’s office within an hour to discuss the situation.

Louise had already spent several hours with marketing and production to see what could be done with the boxes. She was angry, because this had been Longmore’s first delivery on a new contract. It had not been easy to persuade marketing and production to switch suppliers. Imperial Packaging had supplied Earl’s with all of its box requirements for years to the full satisfaction of marketing and production. However, in Louise’s opinion, although Imperial’s quality and delivery performance had been fully satisfactory, their price had been high. Therefore, she had finally persuaded marketing and production to let her go out for bids on Earl’s Puffs, a highly popular line. Longmore Packaging’s bid promised to save Earl’s at least $30,000 a year over lmperial’s.

Jim Shaw was Longmore’s sales representative. He had joined Longmore recently after having worked for years for Domison Bag, a long-term reliable supplier of bags to Earl’s. Louise knew Jim Shaw well and had worked on the Puffs bid with him. She wondered if he was as technically proficient with boxes as he had been with bags, but Jim had indicated to her he had been pleased with the move to his new firm and was delighted to be able to continue doing business with her.

The first order for Puffs boxes totaled $15,600. Longmore was to get its films from Imperial. Louise had given Jim Shaw physical samples of the Puffs boxes. However, Imperial had sent films of an earlier Puffs design and Longmore had consequently misprinted the whole order. The situation had not become apparent until the boxes were delivered to Earl’s plant and the filling department’s team leader discovered the mistake. He had immediately phoned Louise, the plant manager and the marketing manager because there were a number of Puffs orders outstanding that had to be filled immediately. In view of the necessity to supply Puffs orders, marketing and production agreed they could not wait but would have to put the Puffs into the old-design boxes.

Louise had telephoned Jim Shaw to inform him of the error and asked him to come over immediately. She knew that Jim would be upset and had asked marketing and production not to discuss the situation with him. She believed Jim should not know the boxes would he used. It seemed to her that Longmore should shoulder the blame for this incident, even though she wondered if Imperial’s action had been totally unintentional. Since she had submitted the correct samples to Jim Shaw, she believed Longmore should have checked the prints they received before running off the whole order. It was difficult for her, however, to establish what penalty, if any, Longmore should be asked to shoulder in this case.