Question
Mr. Roberts' company Cubb-Cals Limited supplies party and events utensils to a major event organising companies in Ontario. One of such companies is Corporate Events
Mr. Roberts' company Cubb-Cals Limited supplies party and events utensils to a major event organising companies in Ontario. One of such companies is Corporate Events Limited. In April 2018 both companies entered into a few long-term supply contract after negotiations that lasted for 8 months. One of the contracts between both companies was for Cubb-Cals Limited to supply Corporate EventsLimited with 12 pieces of air-conditioned Gazebo tents for a major annual summer event that was scheduled for June 2019. The unit cost price of CAD$8,000.00 was agreed on for the tents. With the new tariffs on the cost of production and transportation of the materials as a result of the newly negotiated USMCA, the cost the overall cost of supplying the tents increased by an average of 45%, and Mr Roberts will be unable to fulfil or perform this particular contract with Corporate Events Limited. As things stand, this challenge will not affect the performance of futures contracts, however, if this is not well managed it could result in a strain in the business relationship.
Applying your knowledge of contract law and legal risk management, what could Mr Roberts have done when negotiating the contract with Corporate Events Limited to mitigate the the potential risk of having to breach this contract?
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