Recommendations for Handling the Quality Tee Shirts Contract Issues

MGT 525 Management Theory & Business Law
Project Part B
Delta State University has assigned the management of the trademarked mascots of the University (the Fighting Okra, the Statesman, and the Lady Statesman) to the College of Business and Aviation. You have been retained by the College of Business and Aviation as a consultant to make recommendations and/or proposals for the mascots of the University. Your recommendations and/or proposals should be developed as if they will be presented to the Dean and the Chairs of the Divisions in the College, and you should remain mindful that this will be a small business. After studying the chapters corresponding to each Assignment, complete that Assignment and submit it through Canvas no later than 11:59 pm on the stated due date. Your submission for this Assignment should be about three pages. Your submission should be developed and written at the graduate school level with any sources properly documented. After submitting an assignment, you will receive a grade and a critique from your two professors: Dr. Deborah Moore for the management issues and Mr. Mack-Arthur Turner II for the legal issues. Your response to the critiques should be incorporated in the Final Assignment. (Parts A-E of this project is worth 50 points each and the Final Project is worth 200 points.)
NOTE: All your recommendations, proposals, and submissions become the sole and exclusive property of The College of Business and Aviation at Delta State University.
A note concerning our custom textbook: chapter numbers are sequential on the Contents page (page iii), but the chapter numbers from the master textbook are used in the text; e.g. Chapter 4 on the Contents page is the same as Chapter 3 starting on page 28 in the text. Page numbers are sequential at the TOP of each page throughout the text; i.e., disregard chapter and page numbers at the bottom of the page; names of chapters at the bottom are correct. Concerning Assignments Parts A-E, the chapter numbers on the Contents page are used.
Specific Instructions for Part B:
Textbook chapters covered: (pages 60-90)
Chapter 8 Ethics & Corporate Responsibility
Chapter 9 Contracts
Chapter 10 Debtor & Creditor Relationships: Bankruptcy
Chapter 11 Regulating Business
1. The College of Business and Aviation enters into a contract with Quality Tee Shirts to manufacture Fighting Okra, Statesmen, and Lady Statesmen tee shirts according to certain specifications. Quality Tee Shirts produces several before making the entire order, and these several are inspected and approved by the College of Business and Aviation. One week before the contracted shipment date, Quality Tee Shirts “requests” an increase in price due to an increase in materials costs outside its control. What should the College of Business and Aviation do?
2. College of Business and Aviation officials confer with you over the above situation, and then you learn that Quality Tee Shirts is teetering on the brink of bankruptcy. You also learn that it is upheld as a standard of excellence for its observance of all applicable OSHA standards and EEOC requirements. Now, what do you do?

Issue 1: Request for Price Increase

The College of Business and Aviation has entered into a contractual agreement with Quality Tee Shirts to manufacture university-branded merchandise. The company has requested a price increase due to rising material costs outside its control, one week before the shipment deadline.

Legal and Managerial Considerations:

• Contract Law Principles: If the contract is fixed-price, Quality Tee Shirts is legally bound to fulfill the terms at the agreed-upon price. Any increase requires mutual consent; otherwise, the College of Business and Aviation is not obligated to accept the new price.
• Good Faith Negotiations: If the contract has provisions for material cost fluctuations, then a negotiated solution might be viable.
• Alternatives:
  1. Enforce the Original Contract: Deny the request for an increase and require Quality Tee Shirts to fulfill the order as agreed.
  2. Negotiate a Compromise: If feasible, offer to cover a portion of the additional costs to maintain good supplier relations and ensure future quality control.
  3. Seek an Alternative Supplier: If Quality Tee Shirts is unwilling or unable to meet the original price, consider sourcing another supplier to fulfill the order promptly.

Issue 2: Quality Tee Shirts’ Financial Instability

Upon further investigation, it is discovered that Quality Tee Shirts is close to bankruptcy but maintains high standards in compliance with OSHA and EEOC regulations.

Strategic and Legal Considerations:

• Risk Assessment:
  • If Quality Tee Shirts declares bankruptcy, the College of Business and Aviation risks non-delivery of products and financial loss.
  • Terminating the contract prematurely may invite legal repercussions unless a breach has already occurred.
• Possible Actions:
  1. Monitor the Situation Closely: Assess whether the company can still fulfill the order and ensure financial reliability before making further payments.
  2. Include Performance-Based Contingencies: Modify future contracts to include performance guarantees or penalties for non-compliance.
  3. Prepare for Supplier Transition: Engage alternative suppliers and establish secondary agreements to avoid potential production disruptions.
  4. Legal Consultation: Seek legal counsel to determine if the financial instability of Quality Tee Shirts constitutes grounds for contract termination without penalties.

Conclusion

In light of these issues, the College of Business and Aviation should take a strategic and legally sound approach. Initially, enforcing the current contract terms while remaining open to negotiation is the best course of action. Simultaneously, preparing alternative suppliers and evaluating potential risks associated with Quality Tee Shirts’ financial instability will ensure continued product delivery without jeopardizing the university’s business operations.

 Struggling with where to start this assignment? Follow this guide to tackle your assignment easily!

Step-by-Step Guide to Writing Your Paper

1. Read the Assignment Prompt Carefully
   • Identify key requirements such as addressing ethical issues, contract law, and debtor-creditor relationships.
   • Highlight specific questions that must be answered in your analysis.
2. Plan Your Paper Structure
   • Introduction: Briefly introduce the case and state the main issues to be addressed.
   • Issue 1: Request for Price Increase
     • Explain the legal and managerial implications.
     • Provide possible solutions with supporting arguments.
   • Issue 2: Financial Instability & Bankruptcy
     • Discuss risk factors and potential legal concerns.
     • Outline recommended actions based on business and legal principles.
   • Conclusion: Summarize key findings and provide a final recommendation.
3. Conduct Research & Gather Sources
   • Use your textbook and credible legal/business sources (case studies, law journals, management reviews).
   • Properly cite all sources in APA format.
4. Write a Strong Introduction
   • Provide background on the contract issue and why it is significant.
   • Clearly state the purpose of the paper and what it will address.
5. Develop Logical and Well-Supported Arguments
   • Use clear headings for each section.
   • Support your recommendations with legal precedents, business ethics, and financial implications.
   • Integrate theories from corporate responsibility and contract law.
6. Cite Your Sources Properly
   • Follow APA guidelines for in-text citations and references.
   • Ensure that all legal references and business sources are properly documented.
7. Revise and Proofread
   • Check for clarity, coherence, and grammatical accuracy.
   • Ensure logical flow and consistency in arguments.
8. Format and Submit on Time
   • Ensure the document meets formatting guidelines (double-spacing, correct font, and margins).
   • Submit via Canvas before the deadline.

 

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