Contracts Analysis Case Study: Muscadine Grapes Contract
The facts of the case are important in this business situation. First, Marshall Peterson is not a Christian like his wife, and he and his wife began attending my Sunday school class 6 months ago. Marshall is starting to explore the Christian faith. While speaking with the couple, I discovered that Marshall owns a small, local health food products store. During this conversation, I mentioned to Marshall that I own a produce company and that Muscadine grades and products are high in antioxidants. I sent a small sample to Marshall and the products and grapes were successfully sold in his store.
At this time, Marshall started placing regular orders with my produce company. Marshall started heavily advertising the benefits of the Muscadine products he sold in his store. My invoices that Marshall received stated that products must be paid for within 30 days. Unfortunately, Marshall pays late, 45 to 60 days out. So far, I have not charged him interest or penalties as my invoice states I can do. I refrained from charging late fees and penalties because of our church relationship.
Recently, a major newspaper ran an article about the great benefits of Muscadine grapes and this resulted in my company having a hard time meeting demands for the Muscadine grapes and Muscadine products my company sells. I was contacted by a company in Texas offering me double the price if I entered into an agreement to supply Muscadine products to the company. I was concerned about my relationship with Marshall and I called him to provide the names of other suppliers to him. During this conversation, he informed me that my son signed a contract on my behalf. I was unaware of the contact and Marshall faxed a copy to me. At the time, my son was 17 years old but turned 18 last month. This contract guaranteed price schedule consistent with what Marshall had...