Mediation Case Studies

Supply Of Goods

The goody bag

It is commonplace, when a new car is bought, for the dealer to present the customer with a goody bag of oils and car cleaning products.

A specialist supplier of automotive parts was suing a car dealership for payment of goods (for goody bags) supplied directly to the dealer, but he had refused to pay, saying there was no evidence of a contract allegedly set up by predecessors at the company.

The parties were not really enemies

It was a pity that this dispute had arisen, because the specialist supplier had excellent products which the defendant company wished to buy, but they were certainly not going to buy when the supplier had the audacity to sue them.

Chris applied some creative thinking. He asked the supplier for the rate of gross profit on the products, and calculated the value in goods which would have to be bought by the dealer for the supplier to recover his debt out of the profit on new supplies.

Everyone was happy

Agreement was reached on this basis: the claim was withdrawn, with an undertaking that goods of a certain value would be purchased over a period, giving the defendant the goods they wanted, and giving the supplier in profit on those goods the amount he was suing for. And, since the two were now back in a business relationship, the expectation was that they would do repeat business for years into the future.

Litigation destroys relationships; mediation can restore them.