As part of this critical essay, it is required to propose a plan of action in the context of a brewing litigation conflict between the two companies. Sterling Co., which suffered heavy losses due to an error in the production of a component company, must decide whether to take the matter to court. The advantages of litigation are observed due to the provable guilt of NoBugs, while the disadvantages are obvious due to additional costs that are difficult to accurately calculate.
Litigations may cost additional spending to a company that has already suffered significant losses. The disadvantage of litigation in this case is the termination of cooperation with the chip company due to the collapse of friendly relations. Considering that the damage done to Sterling has indeed affected many stakeholders, in order to maintain an adequate non-aggressive tone of negotiations, it would make sense to offer a third party to mediate in the negotiations. Probably, a third party could give a more objective picture of what is happening. Thus, the search for alternative peaceful means to resolve the conflict would be an optimistic scenario, taking into account the disadvantages and damage of litigations.
Given Sterling Co.’s prominence as a leading computer manufacturer, their losses are also calculated in terms of the resulting damage to reputation. The loss of customers and shareholders over the next years is simply incalculable, even if in the future the manufactured chips will work flawlessly. It can be assumed that the damage caused to the company is so great and obvious that preliminary negotiations may simply be meaningless. As follows from the case, NoBugs’ mistake in the development of the chips is proven, therefore their responsibility for the loss of Sterling should be easily provable in court. Applicable law in this case proceeds from the breach of contract and specific obligations, addressing the rule of “jurisdiction ratione materiae” (Brosseau, 2022). This principle is an example of common applicable law, building on previous cases of similar breaches of contract that resulted in major damage. Focusing in the company’s activities on direct judicial confrontation with NoBugs, Sterling Co. can count on a successfully won case, which is an undoubtable advantage of litigations in this case. Thus, the conflict should initially be resolved outside the court, but in the event of a consensus that has not built, it is necessary to take the case to court.
Reference
Brosseau, J. (2022). Applicable law. Jus Mundi. Web.