Legume and Arrow Contract Order
IRAC Method Assessment of Case Study
Case Name
Statement of Facts
Issue (Question at Hand)
Rule (Statement of the Law)
Case Name: This is a case between K.K. Legume Inc. which is a sweater manufacturer and Arrow LLC signs a contract with them stating that Arrow will buy a certain amount of brand Arctic Ice which are 100% wool for a one year agreement of $12.00 per unit (Path Finder Advisors, n.d.).
Statement of Facts: However legal action has been determined in the case of contract because two different yet unexpected issues took place that neither company anticipated. The first problem that has been defined is that there is a sheep shortage for making the sweaters which is obvious because there are less and less sheep to shear for the increase in the demand for wool which has affected the suppliers that K.K. Legume Inc. buys their sheared wool from in bulk. The demand was such a drastic increase in price that the increase was raised by 1,000%. Next, there was an unexpected cold front that came in which the demand ended in a 500% enhancement in Arrow's wool sweater orders they placed with Legume compared to any other order average in history. Therefore, Legume requests for Arrow to augment the per unit purchase price to $36.00, however, Arrow rejects the high price per unit to be altered within the contract, and will not pay that amount per unit. Then Legume administration decides to put a hold on the next delivery of sweaters declaring, if Arrow does not do as the contract says and follow through with buying the sweaters that need to be delivered and paid for, then it could lead to Legume becoming bankrupt if they made anymore orders that were not bought at that price from Arrow. Furthermore the two businesses have a very close and long lasting relationship...
These unexpected issues have arose and the disagreements between the long time associates are having to be worked out by their attorneys (Path Finder Advisors, n.d.).
3. Issue or (Question at Hand): Even though Legume and Arrow have worked out a one year agreement for Arrow to pay $12.00 per Arctic Ice 100% wool sweater, but there has been a problem that has risen. Since the two unexpected dilemmas causing the price of wool to increase where Legume has to charge three times as much at $36.00 for each sweater Arrow feels they should not have to pay for the increase because they agreed to pay $12.00 a unit for one year, yet Legume feels that their commitment and long time trading history should reflect on Arrow and they should feel compelled to pay it because it is the ethical thing to do in this situation according to Legume. Arrow disagrees, and they feel they should not have to pay it, and they will not pay it regardless of the price increase because that is not what the agreement was made upon, and the two administrations are unable to work their problems out without contacting legal advice. Should Arrow be made to pay the increased price and still commit to buy from Legume for one year? Or should Legume reconsider this situation and understand that the contract was made out for one price and for one year, even though they look to blame Arrow if they do not stick to the contract or they will go bankrupt? Who is in the right here by law (Path Finder Advisors, n.d.).
4. Rule (Statement of the Law):…
