The Contract, Its Formation, and Liabilities of the Parties - Offer & Acceptance (MGMT-6034)

Nader is the owner of a small aviation parts supplier. He has decided to expand his operations and is looking for new customers outside the area in which he normally operates. On the advice of a friend from university who works a few hours away and knows of an aviation business looking for a new parts supplier, Nader calls Jess, the owner of a aviation design company, on Tuesday. Jess is happy to hear from Nader. The company he normally used had suddenly gone out of business, and Nader's company could solve his problems.

They entered into negotiations over the phone right away, since Jess knew Nader's friend and trusted her judgment. After a great deal of discussion, they agreed to terms. Nader would ship him all the parts his company would need quarterly, and in exchange, Jess would pay him one business day before the scheduled delivery. Jess also promised to pay for the first shipment right away, arranging to transfer the funds to Nader by the end of the week as soon as he got off the phone, and having the bank send him proof of the arrangement.

Nader faxed the usual standard contract to Jess at the end of business on Tuesday, after hearing from Jess's bank. He reviewed it over the course of the next day, since he had already left the office when Nader had sent the fax, and made a few changes. Specifically, he changed the delivery timeline to a week earlier than the date stated on Nader's standard form. He then signed the document and faxed it back late on Wednesday night. Nader signed it when he got into the office on Thursday and faxed a copy with both signatures to Jess.

The date of the delivery chosen by Jess came and went. Jess's office was running out of necessary parts and he needed the delivery badly. He called Nader to complain and to demand delivery. Nader stated that the contract he had faxed him had had a specific delivery date, and that that date hadn't arrived yet. Jess pointed out that he had changed the date. Nader said that he hadn't seen the change and wouldn't be able to deliver the products at that time. Jess then had to arrange to get parts from another source, and since he needed it them next day, paid much more than usual. Jess commenced an action for breach of contract.

QUESTIONS:

Q1.What are the possible legal questions involved in this case? (10 Marks)

Q2. What do you believe will be the probable outcome of Jess`s action? Cite any relevant cases.(10 Marks)

Q3.Would it make a difference to your answer if the entire contract between Nader and Jess had been verbal? Why? (10 Marks)

Q4.What are some lessons business professionals can learn from this case? (10 Marks)

NOTE:10 Marks will be assigned to writing style, format, and use of references.