Introduction
Analysis of the areas and principles of law and key facts determine that Sterling should sue NoBugs due to the supplier’s inability to perform all of its obligations under the contract.
Business Law and Ethics: Principles of Law
A breach of contract is a legal issue in specific domains. Although Sterling and NoBugs have a legally enforceable agreement, the latter has demonstrated non-performance. A violation of a contract, which is a civil wrong, happens when one party cannot fulfill all of its contractual responsibilities. According to civil law, the party for whom a substantial breach has wronged has the option of either choosing to force performance or to choose to seek damages as a result of the violation.
Key Facts
The only firm that, it seems, can make chips that can match Sterling Inc.’s specified standards is its partner company NoBugs, from whom Sterling Inc. has purchased microchips. NoBugs has routinely given Sterling the microchips for a very long time. However, on one occasion, minor flaws in the microchips made by NoBugs led to a disagreement, and Sterling Inc. is thinking about filing a lawsuit.
Analysis
Argument: Legal Information Institute claims that in addition to the losses incurred as a result of the infringement, the offending party is also liable for damages under US Federal law (FindLaw, 2022). This suggests that NoBugs should be held entirely accountable for the loss. Losses could not have been discovered if they had not produced defective microchips.
Counterargument: Since the first contact agreement did not cover unforeseen circumstances, NoBugs might not necessarily be sued. An agreed-upon out-of-court settlement between the two businesses is the best course of action.
Conclusion
All parties must follow agreements that have legal power and effect. Unthinkable expenses and negative consequences on a company’s reputation may result when defective products are.
References
FindLaw. (2022). Breach of contract and lawsuits. Web.