Dazzling Dough Co. sells pizza dough to local pizza restaurants. Most of the restaurants buy at least 150 pounds of pizza dough from Dazzling Dough Co. in each order. Jerry’s Pizza contacted Dazzling Dough Co. to purchase 200 pounds of pizza dough, along with some other items. Dazzling Dough Co. sent Jerry’s Pizza a written contract, prepared by Dazzling Dough Co.’s lawyer, stating that “Jerry’s Pizza agrees to purchase 200 pounds of pizza dough, pizza toppings, desserts and soft drinks for $30,000.” Jerry’s Pizza signed and returned the contract. A few days later, Dazzling Dough Co. sent Jerry’s Pizza 125 pounds of pizza dough and 75 pounds of pizza toppings, desserts, and soft drinks. Jerry’s Pizza contacted Dazzling Dough Co. about the error in the contract and demanded an extra 75 pounds of pizza dough. Dazzling Dough Co. said there was no error, that Jerry’s Pizza signed the contract so they agreed to the terms, and it was not sending the extra pizza dough.

QUESTION

Read the following scenario: 

Dazzling Dough Co. sells pizza dough to local pizza restaurants. Most of the restaurants buy at least 150 pounds of pizza dough from Dazzling Dough Co. in each order. Jerry’s Pizza contacted Dazzling Dough Co. to purchase 200 pounds of pizza dough, along with some other items. Dazzling Dough Co. sent Jerry’s Pizza a written contract, prepared by Dazzling Dough Co.’s lawyer, stating that “Jerry’s Pizza agrees to purchase 200 pounds of pizza dough, pizza toppings, desserts and soft drinks for $30,000.” Jerry’s Pizza signed and returned the contract.

A few days later, Dazzling Dough Co. sent Jerry’s Pizza 125 pounds of pizza dough and 75 pounds of pizza toppings, desserts, and soft drinks. Jerry’s Pizza contacted Dazzling Dough Co. about the error in the contract and demanded an extra 75 pounds of pizza dough. Dazzling Dough Co. said there was no error, that Jerry’s Pizza signed the contract so they agreed to the terms, and it was not sending the extra pizza dough.

After several attempts to resolve the dispute and a pressing need for dough, Jerry’s Pizza terminated the contract and sent Dazzling Dough Co. a check for $15,000 for the 125 pounds of pizza dough, pizza toppings, desserts and soft drinks. Jerry’s Pizza immediately purchased 75 pounds of pizza dough from another company for $12,000. Both parties are threatening to sue each other for breach of contract. They prefer to resolve the dispute out of court because the contract contains a clause that awards reimbursement of attorney’s fees to the winning party.

The board of directors of Jerry’s Pizza scheduled a meeting with you and other senior management at the company to discuss the dispute. You’ll need to prepare a strategic plan overview (an abbreviated strategic plan, not a full plan) for the board that explains why there is a dispute, suggests various settlement proposals, and provides recommendations on how Jerry’s Pizza can avoid this kind of dispute in the future.

Prepare a 525- to 875-word strategic plan overview to resolve the legal dispute for the board (use the bullet point headings provided below to format your overview) addressing the following:

• Summary of Dispute
• Identify the source of the dispute.
• Identify each party’s interpretation of the contract language.
• Identify whether each party’s interpretation is reasonable.
• Identify any missing facts that would be helpful to know in order to resolve the dispute.
• Proposed Revisions to Contract Language
• Recommend specific revisions to the contract’s language so that it is clear what Jerry’s Pizza expected to buy and what Dazzling Dough Co. is required to deliver.
• Ethical Considerations
• Explain the ethical considerations for a company to enforce specific terms of a contract against another company if the other company is mistaken about what was agreed to. Discuss the factors that should be considered.
• Recommendations
• Two to three possible settlement options (e.g., pay for the disputed dough, reduce the amount of dough to be purchased, split the difference, refuse to pay, etc.)
• Two to three methods of dispute resolution (e.g., negotiation, mediation, arbitration, litigation, etc.) that Jerry’s Pizza can propose to Dazzling Dough Co.

Create a one-page visualization to represent the information you provide in this assignment.

• Use the Table, SmartArt, or Chart visual representation options available in Microsoft® Word by clicking on the Insert tab located on the ribbon at the top of the window. Locate the Word Help function in the version of Microsoft® Word that is installed on your computer for assistance.

Submit your assignment.

ANSWER

Ethical Considerations

Enforcing specific terms of a contract against another company when the other company is mistaken about what was agreed to raises important ethical considerations. In this case, Jerry’s Pizza must carefully evaluate the ethical implications before pursuing legal action against Dazzling Dough Co.

Transparency and Good Faith: Ethical business practices require parties to act in good faith and ensure transparency during contract negotiations. If it is evident that Dazzling Dough Co. intentionally misled or deceived Jerry’s Pizza regarding the quantity of pizza dough, then enforcing the contract’s specific terms may be ethically justified (Kimjuhong, 2018). However, if the misunderstanding was the result of ambiguous contract language or miscommunication, Jerry’s Pizza should consider alternative approaches to resolve the dispute amicably.

Fairness and Equity: Ethical decision-making also involves considering fairness and equity. Jerry’s Pizza should assess whether enforcing the contract terms as written would disproportionately disadvantage Dazzling Dough Co (Kalyugi, 2016). If the discrepancy in pizza dough quantity is minimal and would not significantly impact the profitability or operations of either party, it may be fair to find a compromise that benefits both parties and maintains a positive business relationship.

Long-Term Reputation and Relationship: A key ethical consideration for Jerry’s Pizza is the impact of their actions on their long-term reputation and relationship with suppliers. Engaging in protracted legal battles can harm the company’s image and deter future suppliers from entering into agreements (Trần, 2015). Prioritizing open communication, negotiation, and fairness in resolving the dispute will demonstrate Jerry’s Pizza’s commitment to ethical business practices.

Recommendations

To resolve the legal dispute and avoid further escalation, the following recommendations are proposed:

Settlement Options: Jerry’s Pizza should consider the following settlement options:

Pay for the disputed dough: Jerry’s Pizza can agree to pay the remaining amount for the additional 75 pounds of pizza dough, acknowledging that there might have been a misunderstanding.

Reduce the amount of dough to be purchased: Both parties can agree to reduce the quantity of pizza dough to be delivered, taking into account the partial delivery already made.

Split the difference: Jerry’s Pizza and Dazzling Dough Co. can compromise by splitting the cost difference for the additional pizza dough, reflecting a fair resolution.

Dispute Resolution Methods: Jerry’s Pizza can propose the following dispute resolution methods to Dazzling Dough Co.:

Negotiation: The parties can engage in direct discussions to find a mutually acceptable solution, considering each other’s interests and concerns.

Mediation: A neutral third party can assist in facilitating discussions and helping the parties reach a resolution through compromise and agreement.

Arbitration: Both parties can agree to submit the dispute to an impartial arbitrator or panel who will make a binding decision based on the evidence and arguments presented.

By exploring settlement options and alternative dispute resolution methods, Jerry’s Pizza can prioritize a resolution that is fair, maintains a positive business relationship, and minimizes the costs associated with litigation.

Conclusion 

In conclusion, the strategic plan overview suggests revising the contract language to avoid ambiguity, considering ethical implications in enforcing contract terms, proposing settlement options, and exploring alternative dispute resolution methods. By taking a proactive and ethical approach to resolve the dispute, Jerry’s Pizza can safeguard its reputation and maintain positive relationships with its suppliers in the future.

References

Kalyugi, J. (2016). Global businessmanagement. www.academia.edu. https://www.academia.edu/29890419/Global_businessmanagement 

Kimjuhong, L. (2018). Restaurant concept to operation copy. Jahah. https://www.academia.edu/37884687/Restaurant_concept_to_operation_copy 

Trần, H. (2015). Business Ethics and Social Responsibility. www.academia.edu. https://www.academia.edu/15282254/Business_Ethics_and_Social_Responsibility