Two developments result in litigation between Legume and Arrow. First, due to an
ID: 430873 • Letter: T
Question
Two developments result in litigation between Legume and Arrow. First, due to an unanticipated sheep shortage, with substantially fewer sheep to shear, the price of wool skyrockets 1,000 percent. Second, due to an unexpected “cold snap,” consumer demand for wool sweaters increases dramatically, resulting in a 500% increase in Arrow’s wool sweater orders to Legume, compared to order averages over the previous ten years (the parties have a long-standing business relationship.)
Legume implores Arrow to increase its per-unit purchase price to $36.00, but Arrow refuses to modify the price term stipulated in the contract. When Arrow refuses to pay a higher price for the sweaters, Legume ceases delivery, claiming that it would be bankrupted by continuing to fill Arrow orders; further, Legume claims that based upon the longstanding business relationship between the parties, Arrow has at least an ethical obligation to pay a higher price.
Who wins? Does Arrow have an ethical obligation to pay a higher price, based upon such an unanticipated change in circumstances?
Explanation / Answer
Definitely Arrow does not have any kind of ethical obligation to pay a higher price. As based upon such unanticipated change in circumstances. As per the Contract rules, legume has completed all the obligations in the contract which are not performed by him and they were specifically agreed in the contract. Adjust specific condition a row is only need to pay $36 per unit which was mentioned in the contract with Legume. Who is eligible to get compensatory damages they are designed to protect the plaintiff as she perform the whole contract and all the obligations in the specific contract. Arrow as a specific Duty for mitigation of the damages for the usage of efforts in a reasonable way for damage minimization which is offered by the breach of contract of the defendant.
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