Law assignment on formalizing a planning document and negotiation between the buyer and the seller
Task: Briefly create a planning document for each side, Lindsey Oil Representative and the Lindsey Oil station owner, and identify the bargaining zone. Can you discuss in the law assignment all the issues prevailing in the agreement between the buyer and the seller?
Introduction to the law assignment
Rising inflation rate requires additional funds and bank balance to consider a bank loan for leisurely activities. The need to pay off debt acquired from purchase of a boat can be amended once Lindsey representatives reach a satisfactory deal with the service operators. Since the operators were reliable employees of Lindsey oil refinery, it has become a situational crisis for Lindsey representative buyers to employ a new manager for the proposed sale of the service station. This law assignmenthas highlighted substantial issues and methods to reach a favourable deal between purchaser and seller.
Q1. Planning document for negotiation
Substantial issuesin law assignment
Keeping minimum expenses
It is one of the strategies adopted by the seller, as the seller already owed around 60 lakh for the boat. In order to pay the first installment as per the law assignment, the seller had to sell the apartment and had to reside in the small rented apartment near the station. Seller is bound to pay the owed money fully before the trip. On the other hand in order to sail the boat, another 20 lakh is required which seems to be a huge issue in this financial crisis (Ramey, 2019). Due to incessant competition for oil service stations, the operators find it difficult to maintain minimum expenses for leisurely activities. There are about more than 45 lakh of expenditure on personal living, foodind, clothing, insurance, medical emergencies during the trip as per the analysis of law assignment. On the other hand, there is about more than 20 lakh of expenditure on fuel, dock and mooring, and boat repairing in case of the breakdowns. There is 35 lakh in the bank account reserved in order to reside the rest of the life.
Lack of Advertisement reply
Independent service stations running advertisements for around 2 months in order to auction the gasoline station without leading any tempting propositions. According to the law assignmentthis can play a very crucial part in the selling process. Advertisement is the only way to inform the buyers of the gasoline station auction including the value of the station with the benefits it is going to provide the purchaser. The gas station is situated in a great location within the city with a huge profit making ground. The only way through with the seller can hold on to an accurate purchaser in this competitive condition of the market
High market competition
As per the law assignmenthighly Competitive markets claims that the sellers carefully tend to cost and market circumstances, while it pledges only a decent return on assets and deposited capital for those firms that manage to survive (Griffith & Van Reenen, 2021). There is a high market competition in the independent service station industry according to the law assignment. There are large number of buyers keen to purchase the service station but the scenario is that a large number of buyers were having lack of enough money, the offer was not enough fascinated for the purchaser
The law assignment informs that the independent seller is locating for the accurate company to acquire the gas station with an accurate reservation price proposed by the seller (Drutsa, 2020). The seller has estimated receiving around 1.8-2 cr for the gas station. There are few companies that hope to earn this opportunity but on other hand it’s found to have insufficient funds with lack of experience in operating the full-fledged gas station. The buyer in the law assignmentproposed to buy the service station within the 1.6 cr of money but not with the amount proposed by the independent seller. It is defined as the negotiated agreement in which both the parties would agree mutually on a particular amount (Sigurðardóttir, Hotait&Eichstädt, 2019).
It was one of the key elements in the law assignment, the seller was the initial player proposed for the target pricing. In target pricing the seller proposed around 1.8 cr of the money from the Oil Company manager. The seller proposed the offer due to suffering with the financial crisis faced by the seller of the independent service company in the market. The seller already owed a massive amount of money but saved a little for the future livelihood. On the other hand the company proposed to provide just around 1.6 cr of money. The company in the law assignmentfound the gas station didn’t have any employees and the station was not in great condition. The company wanted to expand the business for which the company proposed for the gas station to be a part of the organization. On the other hand the gas station was not in great condition resulting in the company having to spend funds on it to bring it according to the company standards. This result the company proposed for the 1.6 cr offer to the service station which was a fascinating offer in this competitive surrounding.
Best alternative to negotiated agreement as per the law assignmentis another way to close the deal within the purchaser and the seller. The best price offered by a former Oil Company manager is around 1.4 cr of money to the service station and would run the gasoline station individually. On the other hand, the seller was likely to propose the increased value of the station which involved the individual expenditures (Bas & Azogui-Lévy, 2022). Batnaas per the law assignmentrefers to a process which is implemented when the negotiations are not agreeable to the both purchaser and the seller. It was the most fascinating offer by the company to the individual gas station where the sale would enable them to fulfill their dreams. The company was fascinated with the property and had a keen interest in purchasing it. It is to be believed that the sales could be increased with more marketing strategies. The company considered in the law assignmentconvinced the seller to accept the fascinating offer in the sense of fulfilling the dreams and overcoming this financial crisis (Andrei, 2021).
Q2. Issues in agreement and method
Issues between buyer and seller
Cost issue in the law assignment
It is one of the crucial issues that arises within the purchaser and seller and both the parties' proposed amount of money can be afforded. This was the turning point in the situation of the deal. As per the view of Johnstone, Saridakis& Wilkinson, (2019) in law assignment the financial crisis which was one of the worst phases of life which the seller is suffering from. The seller already owed 60 lakh of money but 35 lakh was the remaining amount in the bank for the future livelihood. On the other hand, Lindsey Oil Company wanted to establish themselves within five years so they wanted to buy this station and also surveyed that the gas station is located in a great place in the city but they were interested to pay this vast amount for this station to the seller. Lindsey Oil Company in the law assignmentwanted to pay 1.6 crore instead of 1.8 crore to the seller.
Lack of employees
Lack of employees can be referred to as a non presence of employees in the organization. It leads to reduction in the profitability in the business and results in the poor performance of the business (Oparin et al. 2018). As per the law assignmentit affects the operations of any organization and results in the dip of the profit graph for any enterprise. Before going on the tour the problem arises that the seller bought a ship for which it owed around 60 lakh but now he has to pay off the debt. On the other hand, it was estimated what cost would be required to travel and he found that he had 35 lakhs in the bank account and as the owner knew that his wife had nerve problems, he wanted to secure that money for future expenses. So, they had to acquire 1.8 crore by auctioning the gas station, so it became mandatory to sell it. The price at which the station was bought many years ago will be much higher today and as the station is in a great location in this competitive market (Gans, 2022).
Integrative deal with seller
Bargaining approach in the law assignment
Bargaining approach as per the law assignmentcan play a crucial role for the seller in order to hold on to an accurate purchaser. It is the only way through which the seller can earn a negotiable amount from the purchasing company(Inderst& Montez, 2019). It can be explained as a process of reaching on a mutually acceptable solution within the buyer and the seller. The seller can use this strategy to resolve this conflict with the purchaser. On the other hand, the seller proposed for about 1.8 crore of money but the company wanted to settle within 1.6 crore of money. This is the only strategy that can help to resolve the conflict between the purchaser and the seller through proper communication and understanding the surrounding situations. When the seller is using the bargaining approach communication plays a crucial role in it, persistence and polite assertiveness can help to fulfil the seller’s interest. The seller in the law assignmentcan make the initial offers to the purchase which was seen in the case study. It was the way through which both the purchaser and the buyer would lay off the interest in the sense of keeping the view points, the needs and the goals in order to achieve a common ground and reach a mutual agreement to settle the dealing with the mutual concern (Al Boucherbi&Askari, 2022).
Budget and Detriment
Budgetary control as per the law assignmentis known as the layout of a particular budget by administration to know the alternative between the association’s native performance and budgeted performance (Nafisatu, 2018). It also boosts directors to improve the budgets to monitor and occupy various expenses within an individual accounting time. It is a process of planning and regulating all the activities of an administration through parallelism and exploration of budgeted numbers required to be revised. The law assignment informs that the independent seller is locating for the accurate company to acquire the gasoline station with an accurate reservation price set by the seller. The seller has calculated receiving around 1.8cr for the gasoline station. Setting the budget is one of the crucial points in the business. It can be carried through the datas by the consecutive approach to budgeting in any business in which the cost divers remain static. It can be managed by the growth and the steady profitability. It can be a challenging part of the process. The seller is not convinced with the offer by the company, On the other hand, the seller was likely to propose the increased value of the station which involved the individual expenditures. The company considered in the law assignmentoffered the most fascinating offer to the seller of the service station in comparison to this competitive market. The company knows about the advantages of purchasing the property and the benefits it involves. The company had the high aim to reach that goal and aggressively wanted to fulfill it. There are few companies that hope to earn this convenience but on other hand it’s found to have superfluous funds with lack of knowledge in operating the full-fledged gas station. The buyer in the law assignmentproposed to buy the service station within the 1.6 cr of money but not with the amount proposed by the independent seller. It is defined as the mediate agreement in which both the parties would agree mutually on a particular amount (Pratono, 2018).
It is to be concluded in the law assignmentthat the seller has the finest opportunity to agree with the Oil Company manager as the seller is already drowning in the debt of money resulting in bankruptcy in the coming future. With the money proposed by the company the seller can clear the debts and go ahead with a peaceful life. On the other hand the company has a great opportunity to buy the good service station in that particular area with the station having little competition compared to the other stations. However, the cost of purchasing land and building a similar service station in that area would exceed 2 crores. This is the finest opportunity as per the law assignmentfor the company to acquire the station and expand the business including upgrading it and adding new modern equipments and generating additional revenue to the company.
Al Boucherbi, M., & Askari, Q. (2022). Modern financial investment tools, law assignmentfuture contracts as a model. Eurasian Journal of History, Geography and Economics, 9, 1-11.
https://geniusjournals.org/index.php/ejhge/article/view/1647 Andrei, T. (2021). STRATEGIES USED BY RETAILERS TO INFLUENCE BUYERS. Annals of'ConstantinBrancusi'University of Targu-Jiu.Economy Series, (6). https://www.utgjiu.ro/revista/ec/pdf/2021-06/06_Toma.pdf
Bas, A. C., & Azogui-Lévy, S. (2022). Socio-Economic Determinants of Dental Service Expenditure: Findings from a French National Survey. International Journal of Environmental Research and Public Health, 19(3), 1310. https://www.mdpi.com/1465514
Drutsa, A. (2020, November). Reserve pricing in repeated second-price auctions with strategic bidders.In International Conference on Machine Learning (pp. 2678-2689).PMLR. https://proceedings.mlr.press/v119/drutsa20b.html
Gans, J. S. (2022). AI Adoption in a Competitive Market (No. w29996). National Bureau of Economic Research.https://www.nber.org/papers/w29996
Griffith, R., & Van Reenen, J. (2021).Product market competition, creative destruction and innovation. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4026627
Inderst, R., & Montez, J. (2019).Buyer power and mutual dependency in a model of law assignmentnegotiations.The RAND Journal of Economics, 50(1), 29-56. https://onlinelibrary.wiley.com/doi/abs/10.1111/1756-2171.12261
Johnstone, S., Saridakis, G., & Wilkinson, A. (2019). The global financial crisis, work and employment: Ten years on. Economic and Industrial Democracy, 40(3), 455-468. https://journals.sagepub.com/doi/abs/10.1177/0143831X19866532
Nafisatu, A. D. (2018). Effect of Budget and Budgetary Control on Firms Performance: A Case Study of the East African Portland Cement Company Limited. http://erepo.usiu.ac.ke/handle/11732/3885 Oparin, S., Chepachenko, N., Yudenk?, M., & Kuzovleva, I. (2018, September). The study of growth factors of the profit oriented business in the construction industry. In CBU International Conference Proceedings (Vol. 6, pp. 361-365) https://ojs.journals.cz/index.php/CBUIC/article/view/1183
Pratono, A. H. (2018). From social network to firm performance: The mediating effect of trust, selling capability and pricing capability. Management Research Review. https://www.emerald.com/insight/content/doi/10.1108/MRR-03-2017-0080/full/html Ramey, V. A. (2019). Ten years after the financial crisis: What have we learned from the renaissance in fiscal research?.Journal of Economic Perspectives, 33(2), 89-114. https://www.aeaweb.org/doi/10.1257/jep.33.2.89
Sigurðardóttir, A. G., Hotait, A., & Eichstädt, T. (2019).Buyer and Seller Differences in Business?to?Business Negotiations and law assignment.Negotiation journal, 35(2), 297-331. https://onlinelibrary.wiley.com/doi/abs/10.1111/nejo.12289