Certificate of Inspection – Legal Case Study
- What PerEngineering would have to establish to be successful in their claim for the inspection fee?
While moving towards the contract that is stated above, it is important to clearly define a contract so that it is easy to understand that how this contract is going to turn in future. A contract is said to be a written agreement that binds two companies to bring out a deal successfully. The written contract lets both the parties to stay on what they committed in the start as they are aware of the penalties that they will have to face if they fail to fulfill the contract. The above case study tells what was the contract between the two companies that was Slick design is meant to provide the certificate of inspection in order to fulfill the contract, if the SlickDesign fails to provide the certificate, then the company will have to pay an amount of $10,000. However SlickDesign was unable to produce the verification certificate to PreEngineering. It shows a strong support for PreEngineering that it will let the company to get the penalty fee for the inspection certificate. It was clearly mentioned about the security money in the contract that the SlickDesign has to pay. However the company did not produce the inspection certificate as one of the employees of PreEngineering told them that there was no need of such inspection certificate. The contract between these two companies has been a victim of repudiation as one the parties failed to act accordingly. SlickDesign has done this repudiation as is liable to pay the inspection fee that was decided as the security of the contract. Plantiff has a very strong position that it can present in its case that it is in the position to deduct the inspection fee. However, here is also a weak point that states one of the person in PreEngineering said that there will be no need to produce the inspection certificate. This would let the SlickDesign as downfall so the company should be ready to focus on its point as the person who said that there was no need to produce the inspection certificate should not be free the main persons in contract. Overall PreEngineering can simple show the contract and state that SlickDesign did not provided the inspection certificate and it is the weak point for the defendant that will let the plaintiff get his fee. This contract clearly states that SlickDesign has voided the contract, and also given the right to PreEngineering about repudiation of the contract. It is because the defendant was unable to provide what was written in the contract. SlickDesign will have to pay the fee in any case as they have voided the contract, went against the law on the basis of verbal communication without any evidence.
- What would SlickDesign have to establish to avoid payment of the fee?
The defendant seems to be quite weak in this case as the contract is written very well without any ambiguity and in clear words. The contract clearly states the PreEngineering requires the inspection certificate within the fourteen days of the delivery. Now there are two points that can be considered as in favor of SlickDesign. First of all, it is stated that the inspection certificate is meant to be provided within the fourteen days of the delivery. The delivery has been made to the PreEngineering and it has been more than months. It is quite long period that PreEngineering should have produce a contract alert to SlickDesign if it had done any sort of violation in the contract (Reichman). But it has been six month but PreEngineering did not send any contract alert to the defendant. On the other hand, the case study also mentioned that one of the representative also told SlickDesign that there is no need for the inspection certificate and they should made the delivery without it. SlickDesign should also consider the person and mention his name and his designation in PreEngineering so that they can present him as a proof of their conversation that he convinced company that there is no need of inspection certificate. The reason is that the person from the PreEngineering is also the representative and it can be considered a message from the company officials. SlickDesign considered it an offer from the company and focused on the production of the contract rather than focusing on the development of the inspection certificate. These two points are strong points for the defendants in this case that could let the company avoid paying the inspection fee. If SLickDesign is able to find out the person who communicated about the inspection certificate can be quite a strong defending point for them and save them from paying extra fee. SlickDesign can further look into the PreEngineering and find out if the person was the partner of the company or not. If the person who communicated was the partner in the company, then it defendant will not be liable to pay the inspection fee. On the other hand, the delay and absence of the contract alert can be another advantage to SlickDesign to be free from the inspection fee. However the defendant has also strong points that can save it from the extra penalty.
- Is it relevant who and in what circumstances advised SlickDesign that the Certificate was not necessary?
Considering the person who has told the SlickDesign that whether the inspection certificate was not important is much relevant to the contract. There are different basis for this concept that who was the person. The person and its designation in the organization can be very helpful for SlickDesign as it can get the waver off for $10,000. Let us assume that the director of PreEngineering said that there is no need for the inspection certificate, then the defendant’s is totally gone that he had to pay the security in order to going against what was written in the contract. On the other hand even if one of the director of PreEngineering communicated the same message, then again SlickDesign is not liable to pay the security fee. The person who told this to SLickDesign is a strong evidence in this case as he is the turning point that has let the repudiation happen in the written contract about providing then product along with the inspection certificate (LegalDictionary, 2008). On the other hand, there can be some circumstances that let the organization omit the condition of inspection certificate. Another assumption that PreEngineering would have offered to omit this condition that it might be causing problem in the delivery date of the order. This would let the company to complete the order within the decided date and not to worry about the inspection certificate. Again the matter is the same the person who offered to leave the inspection certificate is very important. There is a thing that in private organizations, the director or the owner of the company could take the decisions and he is liable to omit conditions in favor of the defendant. Moreover, if the partner of board of director was the one to make the offer then it also gives a green signal to SlickDesign not to pay the inspection fee. The reason is that if there are two partners of the company, if one of them makes a mistake or brings any changes in the contract then both are liable to whatever the mistake is and they have to admit and face the decision taken by the other partner.
- What management changes in administering would you implement to protect the interest of the parties and avoid court action?
Considering the case for both the parties, it seems that both of them have been showing some of the loop holes that can let them loose their motives. On one hand PreEngineering seems quite obvious to claim the money from SlickDesign as it is written in the contract and it cannot be denied at any condition. It is the positive and strongest point. On the other hand, PreEnginnering has also a weak point if considering the legal outcomes that is, it did not send any contract notice about failure that the defendant failed to produce even after the six months of delivery. These findings show that there is no surety that PreEngineering is going to get the written inspection fee in every condition. On the other hand, there are also some supporting points for SlickDesign (ASHA, 2014). The defendant has also some points that it can lead to its safety from paying the money. The main thing the defendant can use for its strong support is the person that has brought the communication about the fact that there is no need of producing inspection certificate. The designation of the person can be very meaningful as the person came as a representative from the Plaintiff and offered to not produce the inspection certificate. It could have let the defendant to focus on the delivery of the order rather than producing the certificate. The type of communication is also important in this fact, if the SlickDesign got this message in the written form like E-Mail or any communication related to this, then it can be also helpful for SlickDesign. However it mostly depends on the person who communicated about the inspection certificate. Looking at the recent condition when the important person who communicated about the certificate is not known and there is no other evidence available to SlickDesign, there is no way out that the case is not going to face court action as PreEngineering is looking for its inspection fee.
ASHA, 2014. Types of Business Entities. [Online]
Available at: http://www.asha.org/practice/BusinessEntities/
[Accessed 21 9 2014].
LegalDictionary, 2008. Nature and Contractual Obligation. [Online]
Available at: http://legal-dictionary.thefreedictionary.com/Types+of+Contracts
[Accessed 21 9 2014].
PM4id, 2014. 9.5 SELECTING THE TYPE OF CONTRACT. [Online]
Available at: http://pm4id.org/9/5/
[Accessed 21 9 2014].
SOS.CA, 2014. Starting a Business – Entity Types. [Online]
Available at: http://www.sos.ca.gov/business/be/starting-a-business-types.htm
[Accessed 21 9 2014].
TannedFeet, TannedFeet. Choice of Entity. [Online]
Available at: http://www.tannedfeet.com/choice_of_entity.htm
[Accessed 21 9 2014].