Case Study 1 UNLV Partnership
A Supplier Partnering Agreement at the University of Las Vegas
By
Dominique Fortson
An assignment submitted in partial fulfillment of the requirement for MGMT 608
School of Business Management
National University
Professor Renee Weeks
August 3, 2015
Background
Nevada Office Supply Company (NOSC) started over 15 years ago distributing office supplies to a number of educational institutions in Southern California. With its success in California, NOSC moved into the Nevada region, specifically Las Vegas and Reno servicing major named casinos with the same products. Due to their continued growth, good reputation, competitive pricing, NOSC has opened their second warehouse in Las Vegas. This was especially strategic considering the growth potential in Nevada. Such growth includes, the educational system, the gaming industry, as well as Nevada’s population. Due to the projected growth Nevada will offer, an increase of about 20% in sales is expected.
What legal issues, if any, might be involved in NOSC’s proposal? Although the partnering agreement seems standard with exclusive usage for products needed, there are a few red flags that could potentially cause an issue. Most supplier/ distributor agreements allow for a termination for cause and termination for convenience ("Avoiding the Top 10 Mistakes with Distributor Agreements"). This particular agreement doesn’t mention any form of cancellation or termination policy. Furthermore, on the other hand, the agreement doesn’t mention a semiautomatic renewal, which would allow NOSC to exit the agreement if they should choose to do so. By adding performance into the agreement allows both parties the opportunity to exit the agreement each year. Secondly, the agreement does mention any price change and/or discounts may be requested at Mr. Ashby’s approval. What the agreement doesn’t mention is what transpires if the two don’t come to an agreement on any increases and/or decreases in discounts. This can cause a
By
Dominique Fortson
An assignment submitted in partial fulfillment of the requirement for MGMT 608
School of Business Management
National University
Professor Renee Weeks
August 3, 2015
Background
Nevada Office Supply Company (NOSC) started over 15 years ago distributing office supplies to a number of educational institutions in Southern California. With its success in California, NOSC moved into the Nevada region, specifically Las Vegas and Reno servicing major named casinos with the same products. Due to their continued growth, good reputation, competitive pricing, NOSC has opened their second warehouse in Las Vegas. This was especially strategic considering the growth potential in Nevada. Such growth includes, the educational system, the gaming industry, as well as Nevada’s population. Due to the projected growth Nevada will offer, an increase of about 20% in sales is expected.
What legal issues, if any, might be involved in NOSC’s proposal? Although the partnering agreement seems standard with exclusive usage for products needed, there are a few red flags that could potentially cause an issue. Most supplier/ distributor agreements allow for a termination for cause and termination for convenience ("Avoiding the Top 10 Mistakes with Distributor Agreements"). This particular agreement doesn’t mention any form of cancellation or termination policy. Furthermore, on the other hand, the agreement doesn’t mention a semiautomatic renewal, which would allow NOSC to exit the agreement if they should choose to do so. By adding performance into the agreement allows both parties the opportunity to exit the agreement each year. Secondly, the agreement does mention any price change and/or discounts may be requested at Mr. Ashby’s approval. What the agreement doesn’t mention is what transpires if the two don’t come to an agreement on any increases and/or decreases in discounts. This can cause a
References: Avoiding the Top 10 Mistakes with Distributor Agreements. (n.d.). Retrieved August 4, 2015. http://www.neweraconsulting.com/avoid.htm Rubans, P. (n.d.). 7 Reasons Not to Use Open Source Software. Retrieved August 4, 2015.