Question 1: Bill visits a local car auction and is immediately attracted to a red car labeled ‘Ferrari 1979’ which he purchases from peter. Peter is not a car expert but he has borrowed a book from the library and identified the car as a 1979 model. Bill also sees a classic Bentley which is owned by James, a qualified car mechanic. James informs Bill that the Bentley is operating perfectly on the way to the auction. Bill wanders off to look at another car and in his absence, the engine of the Bentley starts emitting smelly black smoke.
However, by the time Bill returns, the smoke has temporarily cleared and he pays James the full price for the car. Subsequently, Bill discovers that the Ferrari is a fake but he crashes it while showing off to his girlfriend. It is a total write of further. He discovers that the engine in the Bentley is faulty. His mechanic manages to undertake some minor repairs to keep the engine running temporarily but warns Bill that in the long run he will need a new engine. Advice Bill. Question 2: Gethin runs a hotel at a popular seaside resort.
He decides to expand his hotel by adding an extension but his accountant warns him that it will only be economical if built in time for the summer season. His contract with Bob, a local builder, contains the following conditions: 1) The extension will be built by 1 April 30 to be payable for each day’s delay thereafter. 2) The extension must be built using local materials as specified in Gethin’s attached list of specifications. 3. The floor must be fitted by a specialist flooring contractor to be nominated by Gethin. On April 30, the extension is still attractive.
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He is extremely annoyed to find out that the floor had not been fitted by Unique Floor Ltd, the firm he nominated and there are now large cracks in its surface. He is distressed by the whole experience and in fit of anger, dismisses Bob and hires Jack to complete the work. Jack, seizing the opportunity charges Gethin with a double rate for the work. Bob and Jack are now demanding payment form Gethin . Advise Gethin Advice 1: As an initial move, Bill should approach James as soon as possible and inform him about the condition of the Bentley.
As a merchandiser, it is James responsibility to address Bill’s query regarding the car and help him resolve the problem. In addition, James also has the obligation to provide a concrete description of the products that he is offering. He has to be honest in his service and he should not lie to customers for the sake of making more money or else he might suffer from consequences after. Even if the mechanic has done temporary repairs on the Bentley, the possibility of acquiring new engine and spending additional cost in the long run makes the situation harder for Bill.
It is also not reasonable to say that James has no responsibilities on the car anymore since it is already bought because of the car has been damage even before it is bought. According to the law of consumer rights, the merchandiser has the obligation to sell products that are described correctly including the damages that the products may have. The consumer also has the right to return a product if the consumer discovered any failure right after the product’s purchase (ANL 2009).
Applying to Bill’s case, James lied to Bill about the condition of the car prior to purchase so James has right to return the car and ask for reimbursement if ever the car’s engine is not changed. On the other hand, the case of the Ferrari is different. Bill should have informed Peter about the situation earlier so that the issue has been resolved. As a customer, Bill has the right to return the car but since the car has been damaged because of his fault, his right has been void (ANL 2009).
It is true that Peter has lied and Bill can still pursue to take legal actions against him.
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However, the possibility of any reimbursement is low due to Bill’s mistake of damaging the car due to his irresponsible actions. Through a legal process, he can still acquire an amount of money from Peter as a reimbursement but it will not be the same amount that he paid due to the damages on the car that he also has to pay. Advice 2: Gethin can solve by having a negotiation with Jack about the rate of work. Even though Jack is selected to finish the work, it is his ethical responsibility to avoid taking too much advantage of the situation.
As a professional, Jack has a duty to render service for the benefit of his and his client’s party. He should price the service based on its regular price and not based on other unreasonable reasons (Thomson Reuters 2009).
Through a business negotiation, Gethin should explain the situation to Jack and convince him to agree with his proposed rate. Both of them should present their oown proposal of price and be able to defend it. Gethin should explain that since it is just a completion work, the rate should not be very high.
He should also identify the conditions and present it clearly so that any misunderstanding can be avoided. However, if Jack still did not agree, then the best way that Gethin can do is to look for other company that can finish the work and agree with his terms. Since it will be just a completion work, other companies will surely accept the project given that Gethin offers a reasonable rate. Business will still be business and as an entrepreneur, Gethin should know his limitations in terms of offering rates so that he will not end up spending a huge amount of money for the project.
On the other hand, Gethin can sue Bob for not complying with the contract. The fact that Bob agreed on the contract gave him an obligation to follow it and be subjected to rules. In any business, contracts are considered as legal documents and are subjected to agreement between two parties. Anyone who disobeys can be sued and will be subjected to penalties depending on the case (Thomson Reuters 2009).
Bob, as a contractor, should know about the consequences of not complying with the contract.
If Bob is proven to guilty, then he will be liable to pay a certain amount to Gethin to cover the damages that he made and he might also lose his work license.
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Thomson Reuters. 2009. Contract and the Law. Available at http://smallbusiness. findlaw. com/business-forms-contracts/business-forms-contracts-overview-law. html Associated Newspapers Limited (ANL).
2009. Consumer Rights. ThisIsMoney. co. uk. Available at http://www. thisismoney. co. uk/help-and-advice/advice-banks/article. html? in_advicepage_id=130&in_article_id=395991&in_page_id=90