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Finance Assignment | Professional Writing

Case 2 – Consideration Peter and Julia are best friends since high school. Peter operates a family sized office carpet cleaning business, and Julia is an accounting manager in an insurance company. During a social gathering, Julia introduces Robert, the managing director of ABC Ltd to Peter. At the dinner table, Robert agrees to use Peter’s service for 3 years starting from November. On the way to home, Peter is very happy for signing the new contract, he promises to give Julia $5,000 to show his appreciation, but never pays to Julia afterwards.

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Peter also has a contract to clean the carpets of Lee & Fung Primary School at $10,000 per month for 5 years. Because of the fierce competition, many of his clients begin to discontinue their orders. Since Peter does not want to lose another customer, he suggests to Lee & Fung that he is prepared to accept $9,000 instead of $10,000 per month for the carpets cleaning. Lee & Fung happily agrees. Eight month later, Peter writes to Lee & Fung demanding the school to return to him $8,000, being the difference between the original contract price and the reduced price for the services he supplied in the last eight months. He also wants to charge the original price of $10,000 per month from now on. Lee & Fung rejects his request. Comment on the case.

 

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