Fact Pattern 3

You work as a sales executive for a company called Karl's Crafts Inc. Karl's Crafts Inc. manufactures and sells various small crafts and sells them to large craft stores across Canada. BigBox Crafts Ltd. operates several large craft and craft supply stores across Canada. You are approached by Larry Box, the CEO of BigBox Crafts Ltd., who wants to buy products from Karl's Crafts Inc. BigBox Crafts Ltd. tells you that they would like to buy a standard set of goods on the 15th of each month: 10,000 Christmas snow globes; 10,000 piggy banks; and 5,000 stuffed giraffes. Karl's Crafts Inc. sells its snow globes for $10.00 each; its piggy banks for $5.00 each; and its stuffed giraffes for $15.00 each. These prices do not include GST and PST (or HST). However, Karl's Crafts Inc. provides a 10% discount on bulk orders over 10,000 units. Karl's Crafts Inc. usually makes its products available for pickup from its factory (often referred to as Ex Works; meaning the buyer is responsible for all shipping, taxes, insurance, and other costs). Karl's Crafts Inc. usually send invoices to buyers at the end of the month and expects payment within 15 days. BigBox Crafts Ltd. tells you that they have a standard form agreement that they require sellers to use when buying products. They provide it to you and ask you to review it and provide any concerns. They also tell you that they would like the goods delivered to their processing center at 1234 Anywhere Blvd, Mississauga, ON.

1. The CEO of Karl's Crafts Inc. asks you about the standard form contract provided by BigBox Crafts Ltd. Karl's Crafts Inc. usually sells its products based on oral agreements with purchasers. What would you tell the CEO about the advantages of written contracts and the issues with standard form contracts?
2. The CEO of Karl's Crafts Inc. asks you to complete the contract that BigBox Crafts Ltd. provided, to suggest any changes or clauses that may need to be included, and to highlight any clauses that need to be kept in mind to avoid liability in the contractual relationship.