You are the Vice-President of International Acquisitions for a small antique wholesaler, Antiques R Us Inc, located in Montreal.
Six months ago Antiques R Us Inc. purchased from an American firm, Yankee Antiques, a desk used by George Washington after he retired from the Presidency. The only relevant portion of the contract, which was in the form a letter by Antiques R Us Inc. to Yankee Antiques, reads as follows:
“We confirm our verbal agreement to purchase from you a desk used by George Washington after his retirement from the Presidency for US$500,000.00, payable by us to you thirty (30) days after delivery of the desk.”
The reason for the purchase was that you knew a collector of George Washington memorabilia to whom you thought Antiques R Us Inc. could resell the desk at a handsome profit.
When the collector came to look at the desk, two days after its delivery, he did not wish to purchase it and indicated to you that perhaps the desk was not authentic.
The Yankee Antiques is demanding payment. You have advised Yankee Antiques that Antiques R Us Inc. is unsatisfied with the authenticity of the desk and were therefore not prepared to pay for it. Yankee Antiques has refused to accept the return of the desk and is insisting on payment.
Your boss, the President, has told you that he does not want to pay for the desk for a number of reasons:
1. There are doubts about its authenticity; and
2. Antiques R Us Inc. has a severe cash flow crunch and does not have the money to pay.
The President has instructed you to drag the matter as long as possible but to maintain good relations with Yankee Antiques, which is an important supplier.
The President has asked you to deliver to him, by no later than 6:05 p.m., April 12, 2017 a report, in a form of a term paper of approximately 2000 to 3000 words, outlining a strategy for dealing with this problem. Such term paper should not only set out the strategy, in detail, but also the alternative strategies that you considered and the reasons for choosing one particular course of action over others. Finally, he has asked you to discuss the possible risks and disadvantages of the course of action that you recommend.