A Premature Celebration

A Premature Celebraion

Brief Summary of the Problem

According to the case study, it is clear that Herman Von Kellem, the chief negotiator of Dutch Company, had made an agreement with Madrid Mugs on a price of $7.50 per share in order to acquire the company in question. The agreement was not signed, and because of the excitement, Herman opted to start an early celebration. Herman went out with his Spanish counterpart Ricardo Lopez to an exclusive Madrid restaurant and and a fancy night club for drinks. Furthermore, Herman called up his bosses to inform them of the achievement he had attained for the company (Grant, 2005). Unfortunately, the celebration did not last long as Geneva Hasselbraut, the representative of a Swiss Beverage Company, also proposed Madrid Mugs Company an offer of $8.00 per share the next morning. Significantly, the new proposal made Madrid Mugs representatives agree for the new proposal and reject the Herman’s offer, hence causing the problem for him.

Solutions for the Scenario

First and foremost, the status of the agreement might be termed as bilateral because Herman and Lopez agreed to implement a contract without any signing. Unfortunately, it is difficult to prove that there was an agreement in this case; as a result, Herman might end up losing such a case. The first solution to this case is through the court of law where Herman can use such events as celebrating and calling up his bosses to inform them of the success he had attained (Hollensen, 2013). This can be used in the case to generate positive results.

As for Lopez changing his mind, the Dutch Company can opt to sue him as an individual so as to threaten him to do what is right. Such a scenario would force Lopez to admit his mistake because he would be looked at by Madrid Mugs as an incompetent representative. Thus, suing Lopez would be appropriate in terms of ensuring that the company is compensated for the time wasted and granted a possible reconsideration of selling the shares to them (Grant, 2005).

Another solution can entail offering slightly higher share of $8.5 as a way of countering the new offer by the Swiss Beverage Company. This will ensure that Madrid Mugs earns an upper hand in terms of being considered. Furthermore, it will act in their favor as they will be acting in a professional way, which is based on competition (Hollensen, 2013).

Conclusion and Recommendations

In future, it would be prudent for Herman to sign a contract before celebrating and contacting his bosses. Moreover, the above approach would save the company’s time and money as well as show their professionalism and competence. Additionally, future errands by Herman should be initiated by at least two negotiators in order to attain results that are worthy the needs of a company such as the Dutch Company. Moreover, future celebrations by companies should be initiated only after a contract has been signed.

To sum up, the discussed case is significant as it shows how an early celebration can turn out to be disastrous. The case study entails that an agreement was made by word of mouth which was not an efficient entity as it later created problems between the negotiators of Dutch Company and Madrid Mugs representatives. Additionally, it is demonstrated in the above paragraphs that proper steps should always be taken in issues related to contract agreement before a celebration is initiated. Fundamentally, contract signing is the only way out one can boost of having succeeded in the assigned task.