A contract is a promise or a set of promises for the breach of which the law gives a remedy or the performance of which the law in some way recognizes a duty (Cheeseman, 2004). A violation of a valid contract is called a breach of contract. In this case Gentura would be in breach of contract with CadMex Pharma because Gentura has decided to subsidize the production of ViroBlax, which would violate the payment terms of the contract between Gentura and CadMex.Gentura can go to court, but instead chose to get shared marketing rights of another drug manufactured by Gentura. By using arbitration to settle the dispute of the breach of contract saved time and money by both parties and helped in reaching a decision quicker than having to go to court to reach a decis ...view middle of the document...
RemediesTwo remedies that might be available for such a breach they are: consequential damages which are only awarded when the consequences of an action are known beforehand which in this case Gentura knew that they had breach the contract, but decided to do so in an effort to help the epidemic outbreak. Liquidated damages when the amount of damages are already agreed upon in the contract and are typically, stated due to the fact that a monetary value as to the damages would otherwise be difficult to ascertain (Cheeseman, 2004).RecommendationsOne recommendation to solve this issue is for Gentura and CadMex to negotiate an agreed upon sum of money once the company is stable. The monetary figure can be made in payments rather than in one lump sum. This will alleviate concerns of bankruptcy for Gentura. Another recommendation is to allow the subsidization of ViroBlax to ensure that the city can treat the infected individuals and ensure that more individuals do not come infected with this virus. If this recommendation is used, CadMex would have to take a cut in the amount of profit made for this product but could benefit in other ways. In the public eye, CadMex and Gentura would be viewed as companies that care more about people rather than profit by displaying this interest more companies would be willing to do business with these companies. A marketing blitz could also be used to further the compassion displayed by the company. The move could result in a rise in sales for other products that would make up for the loss on the ViroBlax product.Reference:Cheeseman, Henry R. (2004). Business Law 5th Edition: Legal, E-Commerce, Ethicaland International Environments. Upper Saddle River, NJ: Pearson-Prentice Hall.
