19MBA512A - Business Law Case Study - Law Assignment Help

Assignment Task

CASE STUDY The casual meeting between Mohan, a purchase manager with his junior manager and the manager from contract team led to discussion on the recent issues the public sector company they work is facing in the contract management arena. Mohan highlighted how their company is facing issue relating to repeated delay from the supplier side and this is leading to issue of their commitment to the clients not being met. The manager from the contract team, clearly mentioned that the Liquidated Damages clause in the General Conditions of Contract provision help in ensuring these issues are tackled. Mohan suggested to the manager from the contract team to increase the Liquidated Damages amount by increasing the percentage of contract value charged as LD. Mohan also suggested increasing the cap of Liquidated Damages from the existing 5% of total contract value as provided in their company contract template would be a better idea. But manager from contract team was agitated at the suggestion from Mohan and mentioned that the contract cannot be used as tool for pressurising their suppliers and contractors and mentioned that legally it may not be a possible approach. Mohan was not convinced with the statement and further pursued to understand the legal issues pertaining to liquidated damages. But the manager from contract team was not free to explain and mentioned that during another meeting they can discuss about the same. The junior colleague of Mohan (who recently joined the organisation) asked Mohan about the Liquidated Damages clause and sought his help in understanding the relevance of liquidated damages. With the aim of explaining the concept of liquidated damages in a better manner to his junior colleague and also clarify his own doubts Mohan approached his friend who works as a legal consultant. After the discussion, Mohan was provided the case of ONGC v Saw Pipes1, a land 1 (2003) 5 SCC 705 mark case decided by the Supreme Court of India in 2003. The brief-facts and details of the case are provided below:

Questions to be discussed:

1) What is damages and liquidated damages in a contract?

2) Can the damages be pre-determined in a contract?

3) Can ONGC claim the LD amount for delay in the supply of the casing pipe? Is Saw Pipes argument valid?

Case Study: Energy Watchdog v CERC (Civil Appeal No 5399-5400 of 2016, Supreme Court of India)

1) Is there any upper limit cap on the LD percentages in B2B contract?

2) What is force majeure event in a contract?

3) Should ‘change of law/policy’ be considered as force majeure event? Provide reason from the angle of a business manager

4) How will you draft a suitable force majeure clause for your organisation?