Imagine that you have just launched your first start-up: a paper and office supply company called Princess Paper. You are working hard at sourcing leads and securing clients to grow your business. There is another company in your shared building, Van's Refrigeration, that you have approached repeatedly since you opened your business, to no avail.

Then, one day, an email order pops up in your system. Van's Refrigeration has placed an order for 20 reams of your premium cardstock, at $29.99/ream. The owner is getting married soon and he and his young fiance, Phillipa, want to use the card stock for their various wedding stationery, as well as the invitations to Phillipa's upcoming 18th birthday party. Elated at your new customer, you attempt to process the payment to the credit card provided by Van's when they placed the order. The payment is declined.

You wait to hear from Van's Refrigeration on their payment, sure that it was an honest mistake. In the meantime, Phillipa has located a more affordable source for the cardstock. Unaware that her order to Princess Paper has not been completed, Phillipa places a phone order with Saber Supplies, for the same number of reams but at $22.99/ream. Her phone payment is processed and she later receives notice by email that the product has been shipped.

Concerned that you haven't heard back from Van's on their order, you place a call and reach Van himself. You explain the situation. Because he is at work, he is yet unaware that Phillipa has ordered the cardstock elsewhere and he's embarrassed that the card she used on your site did not go through. He confirms the product they want and the price, and provides you with the correct credit card information over the phone. You pull up the original order, correct the payment information, process it successfully, and complete the order, shipping out the cardstock product promptly.

Phillipa and Van show up two days later insisting that they do not want the paper from your company. They want to go with the cardstock they ordered at the lower price from Saber Supplies. But because you have only recently started your company, you really cannot afford to give Van's Refrigeration a refund and you feel that the sale was legitimate. Van and Phillipa angrily reply that they will request a chargeback to their credit card, which they subsequently do, so you are now out both the sale proceeds and the cardstock you sold them, which has not been returned.

However, as it turns out, your product is vastly superior to Saber's, and the couple later decide that they want to use it after all. Because they are not pleased with the quality of the Saber Supplies product, Phillipa throws it away and successfully requests a chargeback for that transaction as well. Saber Supplies receives notice of this and sues Phillipa to enforce the sale. Phillipa is quite irate at this because the trial will interrupt her birthday and wedding planning.

1. Who has a valid contract, if any, and why?
2. Between all involved parties, who do you think will win and why? Explain your answer.
3. What are their possible claims, defenses, and remedies?
4. What are their outcome(s)?
5. What have you learned from the scenario about operating a new business and business law that will help you in your future career?