Business Law Help Question : Specify the identify the legal concept by vendor, explain the concept, and what issues the facts may create.

Sam is a new manager in the finance department of Acme Corporation Acme. The company is mid- sized business with revenues of $250 million. The company is an intermediate distributor (between manufacturers and business end-users) of computers and related items and performs computer systems installation. The finance department in Acme is small as the company like to run lean. Sam started this job right out of school four years ago. Sam started as a general ledger accountant, and five months ago was promoted to the companys accounting manager performing the day-to-day general ledger accounting and directly supervising three para-professionals who perform accounts payable, account receivable and fixed asset accounting. On Monday morning Sam was called into the office of the company President Mr. Jones. Mr. Jones told Sam that Mr. Smith, the Chief Financial Officer of the company, had resigned. Sam had reported to Mr. Smith directly since he was promoted to manager. Mr. Jones, indicated that Mr. Smith had become unhappy about his compensation over the last six months, and on Friday of last week Mr. Smith abruptly resigned providing the company with no notice. Mr. Jones told Sam that he is concerned as to whether Mr. Smith did anything prior to his resignation that may have put the company at risk from a financial perspective. Mr. Jones would like Sam to look at the companys existing vendor files and related contracts. Sam is told that Mr. Smith, as the CFO, had the power to approve and negotiate vendor contracts. Mr. Jones is concerned that there may be some irregularities or open issues in the vendor contracts approved in the weeks immediately prior to Mr Smiths resignation. Specifically, the CEO Mr. Jones is concerned about whether there are any uncertain issues with current vendor contracts or pending contracts which are still being negotiated and if there are any existing vendor disputes that are unresolved. Sam is told that he will have access to Mr. Smiths company computer, the companys vendor files (including the vendor contracts and related correspondence and internal related documentation) in conducting his review. Mr. Jones asked Sam to review the vendor contract files and related documents for the last six months and prepare a memo. The Memo should state, by vendor, what issues Sam found with existing vendor contracts or pending contracts and what possible concerns related to those issues exist regarding contract disputes.

Sam observed the following when reviewing the vendor contract files: 1) File: Monitors R US, Inc. Sam came across correspondence in the files between Mr. Smith and Monitors R US, Inc., indicating that the parties were planning an updating and extending an existing long-term supply contract. They had discussed issues such as pricing, delivery terms and modifying provisions from past supply contracts. However, no finalized or even draft contract appeared in the files.

2) File: St. Louis HVAC Services, Inc. There was a purchase order in the file, issued to St. Louis HVAC Services, Inc., for repairs to the heating and cooling unit in Acmes largest distribution center. There were also unpaid invoices from St. Louis HVAC Services, Inc. Sam checked with the manager of the distribution center and found that repairs had been completed, but that to his knowledge no formal contract was signed and that some of the repairs were incomplete.

3) File: Custom Business Equipment, Inc. A contract was in the file for two dozen laptops from Custom Business Equipment, Inc. for $1,500 per unit. The contract specified the laptops had to have certain performance features (be a specific computer brand, computing speed, memory, and preloaded software). Related paperwork indicated had Acme received the computers two months ago and the computers met all the specification except they were a different brand. When Sam checked with Acmes accounts payable, he found that Custom Business Equipment, had not been paid because Mr. Smith said the laptops were not the brand specified, however the laptops were never sent back to the vendor, but, instead, had been sold to an Acme customer. In addition, the vendor, Custom Business Equipment, Inc, had sent a letter claiming a breach of contract for non-payment, and claiming damages as provided for under the contract of $3,000 per unit.

4) File: Advance Computing Systems, Inc. Acme has a purchase contract with Advance Computing Systems, for four specialized Type A servers (large computers that serve multiple businesses divisions or clients) for $10,000 each. The contract specified that that the servers Acme was acquiring was for a large client of Acmes and that they would be a necessary part of a large computer installation contract, the work on which had already begun. A week before the specified delivery date of the servers, Advance Computing Services, Inc. had sent Mr. Smith an email that due to an unexpected demand for Type A servers they would be unable to provide the servers contracted for. In response to this email, Mr. Smith found another supplier of Type A servers, however, the cost of each servers would be $12,000 each, in addition, due to Acmes immediate need for the servers, the new vendor charged Acme a $5,000 charge for a rush delivery order which Mr. Smith had agreed to. Further, Acmes internal accounting records indicated that due to the delay in obtaining Type A servers, Acme incurred an additional $8,000 in labor costs pertaining to the installation contract. Mr. Smith had notified via email Acmes legal counsel that Acme wished to bring suit for contract damages against Advanced Computing Systems. Legal counsel has asked Mr. Smith to compute the amount and nature of damages incurred as a result of the breach of contract, but Mr. Smith had never replied.

5) File: Computer Peripherals, Inc. There was a contract in the files between Computer Peripherals, Inc. and Acme for the purchase by Acme of 300 Type X document scanners at $100 per unit. The contract consisted of a preprinted form with certain provisions scratched out and other provisions hand written and initialed by the parties (Mr. Smith and the head of Sales for Computer Peripherals, Inc.) Although the contract specified the number and type of scanners to be delivered and the price, the contract was silent on delivery date, payment terms (timing of payment) but there was a hand-written reference to a prior sales contract between the parties. The scanners had been received by Acme but twenty of them were found to be damaged at the time of delivery. Acme had issued a check to Computer Peripherals, Inc. for $28,000 (the full priced for the 280 scanners that were received undamaged). The check referenced the contract date and contained the words paid in full. Acmes bank records showed the check had been cashed by the vendor. Sam found in the files an invoice from Computer Peripherals for $2,000 with the notation unpaid balance and refencing the contract for the scanners. Acmes purchasing department prepared an internal memo in which the following issues were raised: the contract had no provision addressing non-conforming (damaged) goods; because the contract was silent as to delivery date and payment terms they were unsure which party might possibly be in breach of contract; and the contract provided for different unit priced with $110 per unit appearing in the printed form and $100 hand written and initialed in the margin.