Business Law Issue of Payment to Acme Advertising Discussion

Please reply to these two students post.

First Discussion post by student
Discussion 6 by Ken Barnes
Boss,
On the issue of payment to Acme Advertising, no contract for the flyers
was established. They offered to mail flyers to potential customers and
place them at grocery stores for $10,000. However, I counter-offered
for $7,000. They did not respond. Therefore, they did not accept my
offer, and no contract was established. Acme published the flyers,
mailed them, and placed them in the stores independently, without an
agreement from Noice. I do not believe we are liable for the $8,000.
With that said, the ad was an outstanding success, and we sold out of
our product, which has caused some additional issues, but I will discuss
that in a minute. I believe the ethical act from our side would be to
offer them the $7,000 again for their services rendered and explain why
we are disputing the $8,000 invoice. However, if they demand $8,000, I
propose countering with a $7,500 payment. We are still appreciative of
their efforts. But, if they do not take our counter and demand the
$8,000, we should pay them, not because of contractual obligation, but
out of ethical consideration.
An explanation should accompany any payment that we are submitting
only out of our company’s ethical belief in the fair treatment of our
partners and our appreciation of the successful campaign. However,
any future business between Acme and Noice must be via a bilateral
contract only.
There should be no legal standing for customers threatening to sue the
store because there was not adequate store stock, and they would not
provide rainchecks. Legally, the ads solicit offers or are invitations to
make offers (Clarke, 2018). Once the stores ran out of stock, they could
no longer accept offers. The ad did not guarantee store stock levels
nor the granting of rainchecks. However, it appears that rerunning this
promotion would be a wise move on our part after we are confident we
are in a position to maintain store stock better. We may also want to
include verbiage in the ad stating that stock may be limited and stores
will not grant rainchecks. Keeping our consumers and stores happy
would seem the ethical thing to do.
Lastly, regarding the stores’ position for suing Noice, I would have to
refer to our distribution agreements as to whether those contracts have
any elements that were violated by not maintaining store stock levels
during a manufacturer promotion.
References
Clarke, P. (2018, May 1). Advertisements. Retrieved from Legal Match:
https://www.legalmatch.com/law-library/article/advertisements.html
Second discussion post by student
Andrew Paten Discussion 6
There is not enough information from the text to guarantee if Noice
Brewery is liable for the lawsuits from the customers over the raincheck,
but Noice is not liable for the flyers printed out by AA.
When AA billed us for the $8,000 for the flyers, we had never agreed to
any of that. We had sent an offer that was less than what they billed,
and never once came to an agreement and reached out to AA to
finalize a deal. Any negotiations without confirmation is not legally
considered a deal or contract. The agreement would be considered a
bilateral contract if accepted. “Bilateral contract is a “promise for a
promise.” No performance, such as payment of funds or delivery of
goods, need take place for a bilateral contract to be formed. The
contract comes into existence at the moment the promises are
exchanged,” (Clarkson & Miller, 2019). What makes this not a bilateral
contract is that there were no promises whatsoever. Noice never
received an invoice after their $7,000, and never agreed to $8,000 so
even though our ads were a success, we are not liable for the
advertisements. “Sometimes a contract is unenforceable not because
of purposeful bad faith by one party, but due to a mistake on the part
of one party (called a “unilateral mistake”) or both parties (called a
“mutual mistake”),” (Nolo, 2016). This could have been a mistake made
by AA, which would lead them to be liable.
For the liability of the raincheck with the advertisements, it depends on
what is labeled with the advertisements and if we had informed the
stores or customers about having a limited supply. If we included
warnings on our advertisements or to the stores that we had a limited
supply of goods and did not provide raincheck, then we would not be
held liable for the short supply. If the advertisements do not say so, we
will be held liable. “If the grocery store doesn’t have a phrase on the
ad to the effect of “while supplies last”, but runs out of the advertised
product, the store must either be able to prove that it originally
ordered enough of the advertised item to meet the anticipated
demand,” (Ed, 2015). To be sure in the future, unless we know we have
a ton of product in stock, we need to be sure to include warnings of
limited supply if we have advertisements in stores.
Nolo. (2016, April 29). Unenforceable contracts: What to watch out
for. www.nolo.com. Retrieved February 3, 2022,
from https://www.nolo.com/legal-encyclopedia/unenforceablecontracts-tips-33079.html
Clarkson, K. W., & Miller, R. L. (2019). Business Law: Text and Cases (15th
Edition). Cengage Learning
US. https://ccis.vitalsource.com/books/9780357129746
Ed, C. (2015, September 8). Do retailers have to give a rain check if
advertised items are not available? Gwinnett, GA Patch. Retrieved
February 3, 2022, from https://patch.com/georgia/gwinnett/doretailers-have-give-rain-check-if-advertised-items-are-not-available-0