Contract Law and Supply Chain Challenges

The assignment discusses the significance of contract law in facilitating decision-making processes and resolving disputes in supply chain management. It emphasizes the need for legal expertise to navigate complexities and breach of contract scenarios. The document also touches on alternative dispute resolution as a viable option for resolving issues outside of traditional court procedures.

CASE STUDY

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Case Scenario.........................................................................................................................3
Evaluate common challenges faced by procurement and supply chain managers and how to
overcome them.......................................................................................................................3
Appraise main contracting issue and the legal implications for major programmes and project
for successful completion.......................................................................................................5
Critique the main legal issues that related to the formation of relationships in supply chains.. .8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Law is one of the important aspect for every organisation which works on regular basis. It
plays the role of supportive when decisions are required to be taken. There are various types of
law which is used in different different areas for example: company law in the area of corporate
sector, criminal law in judicial department and even there are number of laws which is helpful on
everyone's life (Knapp and et. al., 2019). In context of the file, case study will be solved which is
related with the contract law and where it have been breached who is the defaulter in this case. In
addition, there will be the discussion about common challenges which were faced by
procurement and the supply chain management. It will include about the contracting issues and
the legal implications for major programs and in the end there will the critique on the legal issues
which are related to the formation of relationship in supply chains.
MAIN BODY
Case Scenario
The case scenario is related with Grindley Ltd and Simmenthal Technik Gmbh. There
had been the contract between both the company that Siommenthal Technik will deliver the
computer to Grindley Ltd. The total number of computer that was required to be delivered is four
and it was mentioned that in one month only one computer should be delivery and the date was
decided between 1st of December 2015 to 1st March 2016. the first computer was delivered
successfully but when time comes to deliver the second one it was found that Grindly Ltd was
closed and the reason behind it was festival and new year season. The third order was cancelled
because the ship in which lathe was carried had a collision due to which it was send back for the
repairing work. During the time of installation of fourth lathe it was found that sea water entered
in the ship and even there was no insurance of ship. Because of all this issue Grindley had denied
to accept the order and now Simmenthal is threatening to sue Grindley.
Evaluate common challenges faced by procurement and supply chain managers and how to
overcome them.
There are altogether five challenges that need to be considered by any of the supply chain
manager and they are listed below:
 Customer service: It is necessary that quality of the product must be right and it should
be submitted on time so that customer can be satisfied.

 Cost Control: Supply management team must think that how they can reduce the overall
cost whenever labour, fuel and other expenses increases.
 Planning & risk management: It is necessary to check and update that how planning
can be implemented and for that changes in the market should be known to the supply
chain manager (THE 5 BIGGEST SUPPLY CHAIN CHALLENGES, 2018).
 Supplier/partner relationship management: The most important that that need to
check is that what is the relationship between supplier and the customer because that
shows how good company can perform. This helps to develop better coordination.
 Talent: While operating with any of the client it is necessary that supply chain must have
some sort of talent because that helps to conclude any of the duties in more efficient
manner.
There were lots of challenges which were faced by the procurement and supply chain
manager because of the circumstances which were created during the time period of 1st
December 2015 to 1st March 2016. The first challenges which was faced in this case was related
with the coordination. It was found that there was lack of communication between procurement
and supply chain managers. The contract which they have done were not appropriate because it
should have clear all the terms and condition which must have been followed so that any types of
conflict could have not raised.
Some of the other other problem which were faced by procurement and supply chain
manager was delivery condition because although they have decided that all the machines should
be delivered during all this time period of December to March. But, still there are other problem
as holiday for Christmas and new have been extended and it was the duty of Grindley Ltd they
should have informed Simmenthal though which unnecessary charges would have not taken
place (Ayres and Schwartz, 2014). Even they had not done the insurance of ship in which they
product was to be delivered which shows that they were unable to fulfil the term and condition of
contract. While talking about Grindly, it was found that they were also hampered because third
and fourth delivery of computers were not delivered on time due to which they were unable to
digitalise their work. They might have to deal with the situation which were not favourable for
them as preplanning was not executed as per the plans and policies which were decided by the
company.

In addition, they had to face other problem as well because their was no proper planning,
customer services and cost control. While entering entering into the written contract both buyer
and supplier didn't try to think that how they can control the cost (Hunter, 2017). There was lack
of planning because even they had not decided that when product is to be shipped and when it is
required to be delivered to the party and when payment need to be done.
There are number of ways through which this type of problem can be solved out. It is not
necessary that every time contract can be up to date but still both the party have to think that how
they can make a use of contract. Firstly, it is necessary that each and every single detail must be
mentioned in detail and every sort of work must be done as per the planning so that positive
results can be obtained. Then it is important that contract party must work as per the guidelines
so that chances of conflict cannot be raised. When ever any of the person enter into the contract
it is necessary that how they can take maximum out of it and for this it is necessary that proper
coordination should be done. The chances of obtaining the better outcome always depend upon
communication because it reduces the percentages of unnecessary losses.
Appraise main contracting issue and the legal implications for major programmes and project for
successful completion.
Contract is an agreement executed between two parties which has a valuable
consideration, intention to create legal relation along with obligation and enforceable by law is
called a contract. Every contract is formed which has some specific act to perform. A contract
can be oral or written (Savelyev, 2017). Only a valid contract can be enforced in the court.
Features of a valid contract are as follows:
 Offer and acceptance: It is the first requirement in which one party must make an offer
to the other party which is accepted by the other party. This states that parties have
intention to enter into a contract. In the case of Harvey v Facey, the court held that no
contract has been formed between the two. Furthermore, there was no trace of an
intention to create an offer.
 Mutual assent: There should be a common base upon which terms and conditions are to
be set. It will be treated as the subject matter which defines the nature of the contract.
 Legal relationship: The parties must execute the contract with a view to create a legal
relationship. In the case of Jones v Padavatton, the court held that it was a domestic

agreement between parties and there was no intention to create a legal relationship which
can bound by the agreement.
 Consideration: There must be a consideration which has a value. It must be a lawful
amount which has been decided for the transaction for which contract has been made. In
the case of Re McArdle, it was held that promise to pay the amount has been made after
the part of consideration had been performed, thus, no such promise was valid and
binding as past consideration is not valid. In the case of Tweddle v Atkinson, decision
contended that, the groom was not pasty to the agreement and consideration did not move
from him (Tushnet, 2017). Therefore, no entitlement of consideration can be enforced in
the court.
 Registration: A contract is termed as valid only when it's registered under relevant act.
Also, it can be oral or written. If it's written, then its must be registered.
In UK, contracts are governed by Sale and Supply of Goods, Act, 1994. There is no
individual act which has provisions regulating contracts entered by parties in UK. A breach in
any of the clauses will render the whole contract invalid or rescind. Also, if a part of
consideration is already paid, then it will be forfeited. There are different types of contracts such
as employment, sales, purchase, mortgage, and so on (Witte, 2012). A contract is a good
evidence to prove the arguments in the court, however, in such scenario, it must be in writing.
Furthermore, breach should be avoided as there are penalties which may raise financial burden.
Breach of Contract is the situation where any of the contract party try to break down the
term and condition which were required to be completed as per the contract paper which were
prepared. Whenever breach of contract takes place, there is high chances that case will be filed in
the court. Even contract is said as breach of contract when work is not completed in given period
of time. If plaintiff can is able to prove that there is the breach of contract from opposite party
then defaulter is liable to compensate plaintiff (Oman, 2012). Some of the remedies which are
available for the breach of contract is compensatory damages, restitution, punitive damages and
specific performance.
In the above given case it was found that there was the breach of contract from both the
side because both parties were unable to perform their task as per the set criteria. This types of
problem do occur most of the time whenever we do not try to prepare the agreement as per our
requirement. Here, both Grindley Ltd and Simmenthal Technik GmbK has to suffer from losses

because default was done from both the side. In my point of view, they should have prepared the
legal contract where each and every steps must should have been followed. It is necessary that
planning should have been done through which chances of completing the terms and condition of
the contract will be high. As, Simmenthal Technik GmbK wants to sue Grindly but they must
think that default had been done from their side because they were unable to deliver the compute
on time. So, it will not be easy for the them to succeed in this type of case. It is better for both the
party that they should try to form new contract where they will get the option to prepare new
contract paper and after that they must try to perform their individual part of work which can
help them complete the contract easily (Morgan, 2013).
In addition to my opinion, both the party have option to take the help of Alternative
Dispute Resolution to solve their dispute because it is found that after the breach of contract
Simmenthal Technik GmbK want to sue but that is not the appropriate solution for them because
proceeding of court always consumes unnecessary time due to which business can be affected
easily.
Alternative Dispute Resolution (ADR)
It is the widely used technique for the purpose of solving those issues which can be sort
outside the court room. This is one of the finest technique to resolve civil nature of issue because
it consumes less time and money which is an additional advantage for any of the association
(Eidenmüller and et. al., 2012). There are alternate method under ADR process which is helpful
for sorting the problems. The method is mostly selected as per the nature of dispute. The detail
information about various method is explained below:
 Negotiation: This is helpful method among all of other method because under this
problem are sort by trying to reach near to the term and condition of the contract and this
is one of the best solution to clear out the problem. Disputed party is required to negotiate
in some of the points (Zamir, 2014).
 Arbitration: This is among the lengthiest process among all methods in ADR because
decision is declared under this by the person who is appointed. Arbitrator are appointed
in this and they are the person who is highly experienced in solving legal dispute.
 Mediation: It is counted as one of the general way because this try to solve the issue by
the method of giving appropriate advices. Disputed parties have the option to not follow
the instruction which is given by mediator.

It think they should solve their dispute by taking the help of arbitration method because
decision which is declared under arbitration are necessary to be followed.
Critique the main legal issues that related to the formation of relationships in supply chains.
There are number of formation that need to be considered by the supply chain
management because that will help them that how any of the work is required to be done. Legal
issues are necessary to be considered because every single detail is mentioned under it. Some of
the legal aspects which are to be followed by supply chain manager are listed below:
 Sources of law: In this, manager is required to know what are those sources of law under
which contract have been signed (Cotterrell, 2018). It is important that work must be
done as per the requirement of law.
 Unenforceable contract: The most important thing which is required to be considered
by supply chain management is that contract should be legal and must be enforceable by
the law else it will not be counted as valid contract. If contracts are enforceable then non
of the party have option to breach it else legal action can be taken against them.
 Contract Performance: Supply chain manager are required to know what is their duty
while performing any of the task. They must try to perform only task where obligation to
complete it is in their hand.
 Warranties and Product Liability: It is necessary for supply chain manager to
understand about the product and warranties of those product and whose liability will
arise in any of the default (Lan, Pickles and Zhu, 2015).
 Other law affecting purchasing: Whenever person purchase any of the product there are
chances that various types of laws can be applied on it. For example: if person purchase
any of the food product then two different laws are applied i.e., taxation law and food and
safety law. In the same manner it is necessary for Supply chain manager to know about
the law which are being applied while purchasing and selling the product.
These sources do affect the day to day working policies of supply chain management.
There are positive as well as negative side of these legal sources because it provides the
guidelines that need to be considered while performing any of the work. It provides the accurate
guidelines through which working condition becomes much and more easier. Sometimes it do
create issues as well because many times supply chain management wants to perform their task
of their own but due to some of the circumstance of the law they are bound to work as per the

term and condition (Kraakman and Hansmann, 2017). So, these legal formation do have some
problem and some solution during working phase.
CONCLUSION
It is concluded from the file that law has its own importance because decision making
process becomes easier under this. Contract law plays the huge role in any of the agreement
because it decides what the criteria that need to be considered while performing any of the task.
There are number of challenges arises but it is necessary for supply chain manager that all those
issues must be solved by taking the help of legal advices. Whenever there is a breach of contract,
plaintiff have the option to sue defaulter in the court. Also, when ever dispute arises there is the
option that those issues can be solved with the help of Alternative Dispute Resolution because
every time it is not necessary that legal problem must be solved by the procedure of court.

REFERENCES
Books & Journals
Ayres, I. and Schwartz, A., 2014. The no-reading problem in consumer contract law. Stan. L.
Rev. 66. p.545.
Cotterrell, R., 2018. The development of capitalism and the formalisation of contract law. In
Law, state and society (pp. 54-69). Routledge.
Eidenmüller, H. and et. al., 2012. The proposal for a regulation on a common European sales
law: Deficits of the most recent textual layer of European contract law. Edinburgh Law
Review. 16(3). pp.301-357.
Hunter, H., 2017. Modern Law of Contracts.
Knapp, C. L. and et. al., 2019. Problems in Contract Law: cases and materials. Wolters Kluwer.
Kraakman, R. and Hansmann, H., 2017. The end of history for corporate law. In Corporate
Governance (pp. 49-78). Gower.
Lan, T., Pickles, J. and Zhu, S., 2015. State regulation, economic reform and worker rights: The
contingent effects of China’s labour contract law. Journal of Contemporary Asia. 45(2).
pp.266-293.
Morgan, J., 2013. Contract law minimalism: a formalist restatement of commercial contract law.
Cambridge University Press.
Oman, N. B., 2012. Markets as a Moral Foundation for Contract Law. Iowa L. Rev. 98. p.183.
Savelyev, A., 2017. Contract law 2.0:‘Smart’contracts as the beginning of the end of classic
contract law. Information & Communications Technology Law. 26(2). pp.116-134.
Tushnet, M., 2017. Comparative constitutional law. In The Oxford handbook of comparative law.
Witte, J., 2012. From sacrament to contract: Marriage, religion, and law in the Western
tradition. Presbyterian Publishing Corp.
Zamir, E., 2014. Contract Law and Theory: Three Views of the Cathedral. U. Chi. L. Rev. 81.
p.2077.c
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