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The case study that follows is about two business associates, Knarles and Barkley, who are father and wife. They run a facilities management business together, with the main focus on building repairs and equipment overhauls. The organization operates in three states: Maryland, Colombia, and Virginia. The corporation also entered into arrangements with many buildings to provide repair facilities, mostly the replacement of broken-down water heaters and boilers. Barkley signed a contract with Chetum, a Northern Virginia resident, while Knarles (Barkley's father) was away on business. Barkley sends Chetum a written agreement on the maintenance works, which he signs and even pays Barkley the first cheque.
It happens that Chetum’s building was without heat, yet winter was fast approaching. Barkley immediately sends his licensed plumber to troubleshoot what the problem would be. The plumber advises that Chetum’s building needed a replacement of the currently installed boiler, which he advises the company owner-Barkley. Barkley informs Chetum what the solution to his problem would be. However, Chetum insists on a quick fix - having the boiler fixed temporarily.
The plumber advises Barkley that it would be possible, but this risks the seepage of carbon monoxide, which is hazardous to the building occupants. The plumber, however, says that Barkley, being the owner, should give him an instruction on what to do. Thus, Barkley confirms that the plumber should go on with quickly fixing the problem. Thus, the plumber fixes the boiler.
No sooner had he done this than a tragic incident follows- several of the building occupants in Chetum's building are hospitalized, with severe respiratory conditions. About the same time, Knarles, Barkley's father returns from his business trip and learns of the unfortunate incident. He immediately withdraws the contract earlier signed between his son; and Chetum. This, therefore, prompts Chetum to sue the company jointly owned by Barkley and Knarles, for breach of contract.
According to this particular case study, we have two individuals who are related to each other as father and son, i.e. Knarles and Barkley. Barkley is seventeen years old. The two have a company whose main job is doing maintenance for building, i.e. cleaning facades, replacement of damaged boilers or water heaters.
Two issues are worth noting here, one of them being: is Barkley old enough, according to what the law allows, to be a business partner with Knarles his father? Is he allowed to enter into any kind of business or “sales contract” without his father’s consent? (Goetsch & Davis, 2014) In that case, his entering into a contract with Chetum in his father's absence is considered as a contract that has been signed without the consent of both parties, hence dismissed as a null contract?
Another very detrimental issue to note is, what are the individual roles of Knarles and Barkley in the company that they share? Does Knarles have superior authority in comparison to his son Barkley, so that he is the only one with the sole authority of signing any contract on behalf of the company? Is there any evidence that the company has, which is sealed and confirmed by a legal personnel, on the authority that each of these two business partners has? Would this written agreement be important in being used as a source of defence in a court of law?
According to the building contracts that this company employs while signing agreements with building owners, they are to do maintenance to buildings of residence and those used for business purposes, within three main states, i.e Columbia, Virginia, and Maryland. These are therefore the jurisdictions, which they cover. Additionally, the range of contract sum is 2000-4000 dollars depending on the building sizes and hence the amount of work that would be involved. In the event that there would be a need for replacement of a plant in the building, e.g a boiler plant or a heat exchanger, then the cost thereof would be billed to the building owner.
All these terms were clear to the clients of Knarles and Barkley’s company. However, something detrimental to note is that Knarles had a good relationship with the clients that he dealt with, and in case of any variations from the initial contract agreements, them they would be implemented, without doing amendments to the initial contract agreement. This was quite hazardous, as it would definitely put the company into subjection, in the event that there was any breach of contract.
The risk that lies in failing to renew initial contracts in case of any variations, is that the client or the company may perform a tort. This means that, by an act done or a duty that has not been done, then the offender causes injury, i.e. a civil wrong which the court holds them liable, which may also result in harm, i.e. loss on the part of the defendant” (Born & Puelz, 2016). In that event, Knarles or his client, whoever it holds true, will have a legal right to sue his offender. It is therefore important for Knarles and Barkley as the company owners to cover themselves through the formation and consistent renewal of contracts where a need arises.
In fact, not anything that was not included in a written agreement would be in the court’s jurisdiction to judge, as it would be termed as being ‘devoid of tangible evidence’. In order for the court to be able to make a fair and just judgment, they will need tangible evidence from both parties, i.e. the plaintiff and the defendant. “A jurisdiction is the legal authority to carry out a ruling or judgment, and be able to decide a case” (Briggs, 2005).
It is important to note that Knarles and Barkley have a written agreement with one of their workers, who is a licensed plumber. The employment contract between the company and the plumber has it that the company has to renew his license every year, for as long as he works for this particular company.
This employment contract period was two years, so the period had lapsed, considering that it was already four years since the creation of the contract. Furthermore, the plumber's license failed to be renewed that particular year following Barkley's negligence. Unfortunately, his father had always renewed the plumber's license religiously, but because he wanted his son to gain experience in this matter, he delegated the license renewal to him.
The failure was therefore on both Knarles and Barkley as business partners, any fault committed by either party goes to the effect of both. Knarles goes for an official trip, and during this period, his son enters into a contract with Chetum, a building owner. It would have been wise for Barkley to consult his father before entering into such an agreement.
The fact becomes explicit much later when Knarles discloses that he would never have gone into agreement with Chetum. In fact, Chetum signs the agreement and hands in the first cheque to Barkley, which further solidifies this particular agreement. This is because having received payment, the company has to provide services to its client, when the need arises, i.e. binding contract.
Contract formation between Barkley and Chetum means that if either party fails to do what has been indicated therein, then he would have committed a tort and hence be in a “breach of contract” (Cameron & Sosik, 2016). There was a signed agreement between Barkley and Chetum, meaning that both of them had to fulfil the terms of the contract, to whomever it applies. Chetum already fulfilled his, by giving payment. It was, therefore, Knarles and Barkley's obligation to concur with that, through providing any maintenance services needed.
An in-depth analysis of the events that followed the signing of the contract reveals a lot of things. Chetum, the building owner is in need of maintenance services, as his building was without heat, yet winter was fast approaching. Therefore, Barkley sends his unlicensed plumber to check out what the issue was. This is a legal breach, having sent a plumber who does not have the authority by the law to work without an updated license.
Therefore, in case of any fault in duty, he will be liable to be prosecuted in a court of law. Having the knowledge of the law as a trained plumber, he would have insisted to his boss that working without a legal license would not only put himself at risk, but also the company's good reputation was at stake. Definitely, such a situation would cause the company to not only lose business but also be prosecuted and incur losses from the legal proceedings.
The plumber is quite professional in his job, as he is able to identify that the boiler in Chetum’s building was faulty, as its venting system risked leakage of poisonous carbon monoxide, posing a great risk to occupants. It is clear that this was a loophole that would cause problems if it was not properly documented. In addition to that, the plumber discovered that the boiler had not been properly installed, which means that it was a health hazard not only to the occupants but to technical operators as well.
Having established all that from his survey, the plumber informs his Boss-Barkley of all the shortcomings. Barkley goes back to his client to advise him that the only safe solution to restoring heat in his building was the replacement of the boiler. Chentum, however, wants a quick solution and insists on a quick fix of the existing boiler for the winter. Clearly, he is aware of the problematic boiler. Barkley does not stick to professionalism, and he goes on to borrow his client’s shortcut, despite being forewarned by his plumber. To make this matter worse, Barkley fails to clarify all the arising issues in a written agreement, and he is therefore bound by his actions that are not accounted for.
In the case study, Barkley says to his plumber that he was not willing to fix the boiler, but the client's needs superseded his will. Barkley further tells his plumber that he did not want to lose business due to poor customer service. In view of all this, the plumber concedes and goes on to fix the damaged boiler, unwillingly.
If both Barkley and his plumbers stuck to the codes of work ethics, then they would not have put the company and more importantly the business in jeopardy. Barkley, on his part, would have promptly renewed the plumber’s license, and he would have documented the abrupt measures that his client Chentum was forcing him to make.
Additionally, he would have ensured that the company was not involved in shady and unprofessional work, which definitely put the company at risk. Furthermore, the plumber would have declined being sent on an errand without having an official work permit. He would have courageously defied his bosses’ instruction of fixing the boiler and risking peoples’ lives for the sake of maintaining customer service.
Alas! The unexpected happens! Following the quick fix of the boiler by Barkley's plumber, several people are hospitalized from inhalation of poisonous carbon monoxide. Chetum building is used for residential purposes, hence the adverse effect on its occupants from the damaged boiler. Knarles, who is now back, gets to learn about this incident through a local newspaper. He is not aware of the contract signed between his son and Chetum, and therefore dismisses the case as having nothing to do with them, terming him as a shady operator.
Knarles is appalled by the knowledge from his son that the incident was directly linked to their company. This means that they were at fault for committing the crime through direct indulgence. They had done the maintenance, which resulted in a health hazard that they were very much aware of. In the event that they are questioned, they will by no means be able to evade the accusations. The fact that Knarles and Barkley were partners meant that they both were victims of the occurrence, i.e. negligence by either party results in an effect on both the business partners, as they too were in a contractual agreement. In as much as there were terms that were binding for Knarles and Barkley, there was a major limiting factor- they were related by blood. This meant that any adverse occurrence would be savored by the relationship they shared, which was not solely business.
Knarles immediately terminates the contract and refunds Chetum's money without giving him a hearing. Knarles did not even consult his son before doing that, and it is clear that he is the one with authority to enter into contractual agreement with any client. Cheatum sues the company for breach of contract. The fact that the company consists of partners, means that both Knarles and Barkley are guilty of the accusation from Chetum.
Being well aware of the kind of client that Chetum was, he decided that the only remedy to the current disaster was to end the contract earlier signed by his son. However, the sales contract was a binding agreement that had to be followed unless otherwise stated by a court of law. Therefore, both Knarles and Barkley were bound by this contract and had the obligation of taking responsibility according to any terms therein. Forthwith, they would pay for any harm caused in their line of duty while fulfilling the contractual agreement. Chetum had the legal right of taking Knarles and Barkley to a court of law, because of the agreement that was between them, However, he was solely responsible for the damage that ensued, following his negligence. He had purchased a boiler that was faulty, and it had even been recalled by the manufacturer, a duty that he did not fulfil ultimately.
Making the matters worse, Barkley had advised that the existing boiler plant had a non-functional venting system, which would result in a health hazard through the release of carbon monoxide. All these advice was ignored. Chetum was only keen to make quick profits. Similarly, Barkley disregarded the need for ensuring safety and professionalism, and he was quick to go into an agreement ignorantly.
For a sales agreement to be safe, both parties have to enter into a business contract. This is a written agreement, with all the underlying terms of the contract clearly stated. Knarles and his son Barkley used to form contracts with their clients, based on a standard form that they employed. During the business practice, variations from the contract were bound to occur. It was therefore detrimental to document each detail of the changes, to ensure that they still maintained contractual terms with their clients.
In this particular case, Barkley failed to capture the changes from the initial contract he signed with Chetum. As a norm, Knarles and Barkley had quite a good relationship with their clients, so much so that they assumed these variations and implemented them as a form of customer service, which they were certain would be paid. The agency owned by Barkley and his father were lucky, because Chetum did a payment upfront, before the maintenance services were given him. In the event that this unfortunate incident of Chetum residents being hospitalized had happened without Barkley having received any payment; he would as well have paid for both the damage and suffer the loss of using his resources on the maintenance job.
Additionally, Knarles and Barkley, being partners, risked being prosecuted for negligence, as they employed a plumber whose license they failed to renew. On the other hand, it was not ethical for Chetum to sue Knarles and Barkley, yet he knew that he too did not follow the right precautions of ensuring safety for his residents. Therefore, the company has a ground of defending themselves. They can only win the case, if the jurisdiction concerned decides to give them a benefit of doubt.
Born, P., & Puelz, R. (2016). Are Preferences for Structured Settlements Consistent with the Loss-Minimization Objective of Tort Law? Journal of Insurance Issues, 113-136.
Briggs, A. (2015). Civil jurisdiction and judgments. CRC Press.
Cameron, J. C., & Sosik, J. J. (2016). Corporate Citizenship: Understanding the Character Strength of Citizenship from Corporate Law and Leadership Perspectives. Journal of Behavioural and Applied Management, 17(1), 3.
Goetsch, D. L., & Davis, S. B. (2014). Quality management for organizational excellence. Upper Saddle River, NJ: Pearson.
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