Case 4

Cindy Williams is the owner of Williams Concrete Company. Her company fabricates and supplies pre-cast concrete slabs for home construction throughout the Omaha area. Dunn Construction, one of her highest volume customers recently discovered a problem with slabs supplied by Williams Concrete. Dunn is a major home builder that focuses on the upscale housing market. In most months, Williams Concrete supplies Dunn with hundreds of pre-cast slabs.

Because of an error in the fabrication process, the concrete slabs for 23 of Dunns new homes did not meet basic materials requirements. This was not discovered until after the homes were completed. It has been determined that none of these homes are safe for habitation. Homeowners must move out and the slabs must be replaced at a considerable cost and months of inconvenience for the homeowners. As a result, Dunns reputation has suffered.

The slab fabrication process is complex and the possibility of a problem like this was not unforeseen. For this reason, Williams sales contracts with all vendors make it the responsibility of the purchaser to test the quality of all slabs before installation.

Dunn contends that despite this provision in the contract, Williams could be reasonably expected to supply quality slabs and they should assume the liability for the current problems. Dunn is demanding that Williams pay $20 million to cover the damages.

Write responses to the following:

1. From Williamss point of view, is litigation or Alternative Dispute Resolution (ADR) preferred? Why?
2. From Dunns point of view, is litigation or ADR preferred? Why?
3. Which form of ADR could be preferred by the two companies?