Question

Shantou Real Lingerie Manufacturing Company (Shan- tou) is incorporated in China. Shantou manufactures and exports garments to the United States. Native Group International, Inc. (Native), is a corporation organized under the laws of New York engaged in the business of selling intimate wear to the wholesale and retail market. Between May and November 2013, Native placed dozens of orders with Shantou for lingerie. Following each order, Shantou issued a sales confirmation to Native, which referenced the cost, quantity, and type of goods ordered. These confirmations were signed by a representative of Native. Thereafter, Shantou manufactured the goods in accordance with the requested specifications. Between October 2013 and February 2014, Shantou delivered the goods specified in the confirmations to Native through five separate shipments. Shantou also included in each of the five shipments an invoice, indicating the total balance due, as well as the price, quantity, and type of products shipped. Native accepted each shipment, retained the goods delivered, and never claimed a set-off or credit. The total amount invoiced for the five shipments was $437,562.20. Native made payments totaling $165,522.80, leaving an unpaid balance of $272,040.40. The commu- nications between Shantou and Native were silent with respect to the governing law. Native claimed that there was no written contract between the parties when Shan- tou subsequently filed a lawsuit against Native for the unpaid balance.

Do a Case Analysis for the following

1) Mention the main Problem in the case

2) Mention 4 Alternative course of action, that could have been done to prevent this problem

3) Evaluating each of those 4 alternatives with advantage and disadvantage

4) Choose the best Recommendation for this case

Answer 1

Shan-tou is Lingerie Company. Native company places several garment orders from Shan-tou as it sells intimate wear and sent goods to Native expecting that entire amount will be paid.But Native failed to pay the entire amount.

1)The main problem in the case is that Shan-tou had not made any contract or agreement of sale with Native and sent orders.Native took it as chance and claimed that there is no written contract made.It is a bit difficult for Shan-tou to prove that he left being unpaid seller.

2)To prevent this problem 4 alternative courses of action could be taken.They are:

a)By entering into a legal contract.

b)Written agreement with signatures of both the parties(Shan-tou and Native)

c)Advance payment for goods

d)Sending part of goods for initial payment made and the other parts of goods to be sent only after paying the  remaining payment

3)Advantages and disadvantages of alternatives :

a)The legal contract would act as strong proof at law or court.But the procedure for entering into a legal contract is lengthy and time consuming process.

b)Signing on written agreement which consists of acts to be performed by the parties would remind that party which failed to fulfil the responsibilities.At times written contract might be manipulated by altering terms of contract and even courts does not accept written agreements which on not made on bond paper or legal paper.

c)When amount is paid in advance,the seller can transfer ownership of goods without any tension.At times,buyer disagrees to make payment in advance due to low cash or lack of trust on seller.

d)Firstly,seller should wait for partial payment and then send goods to buyer.Later if buyer makes payment for remaining goods then the rest of goods can be sent to the buyer.In certain situations,this alternative might increase shipping costs or else buyer might be in immediate need of goods.

4)The best method of solving this dispute might be repossession of goods or suing the property from Native until payment is made. Shan-tou can repossess goods or gain the custody property or belongings of Native.After the fulfilling the payment of unpaid balance belongings or goods can be returned back to Native .