Atlantic Diving Supply, Inc. v. Bancroft Global Development Case Study

Atlantic Diving Supply, Inc. v. Bancroft Global Development - Case Study Example A lawsuit was filed by ADS in Virginia Beach Circuit Court in February of 2011. ADS alleged that Bancroft had ordered and accepted the boots along with other products such as battle-dress uniforms, pistol belts and field jackets but only had paid for half of it. Bancroft is accused of breach of contract and conversion. ADS argued that Bancroft held on to the goods that it had actually rejected and hence demanded $1 million. A statement by ADS’s attorney said that Bancroft owed ADS money and hence they are suing it (WTOP, 2012). Bancroft on the other hand countersued ADS for $1.1 million. It accused ADS of breach of contract and fraud. Bancroft argued that the boots supplied were of poor quality and fake military boots. The boots were not intended for military use as they were designed to be costume boots. The quality of the boots is said to be so poor that it would not even serve the purpose of daily regular use, let alone military use (WTOP, 2012). The main reason for the disagreement is that the boots were of poor quality and wore out on just a few uses. Bancroft says that it relied on ADS to provide boots that were of military specification. Even though this was not mentioned in the purchase order, the specifications of the product needed were mentioned in the purchase order by DynCorp which was forwarded to ADS. Hence Bancroft argues that as ADS was aware of the military specifications of the product and still provided with low quality products. Therefore it has indulged in fraud and breach of contract. Bancroft had arranged for the delivery to be picked up by a third party and have it delivered to Uganda. There were no inspection checks done and it is only after the problems surfaced, that an official inspection was conducted and the boots officially rejected (McCabe, 2012). ADS has argued against the above allegation by saying that the products were selected based on the price quote by Bancroft. There are no military boots available in their price range. It also argued that all military specification was carefully removed from the purchase order by Bancroft in order to save money. They argued that Bancroft wanted to the cheapest products at the earliest and they were delivered what they asked for. ADS also blame Bancroft of taking too much time in rejecting the goods. It argues that if the products were detective, then should have been immediately rejected (McCabe, 2012). Judgement has not been reached yet and evidences have been submitted by both parties to prove their claims. Risk Management by both Organizations There are various risk management steps that could have been taken by both organizations to avoid. First and foremost, each organization should have added an expressed condition in the contract that would ensure that their interests are served. An express condition would explicitly set forth the terms and conditions of the deal (Salzedy & Brunner, 1999). Bancroft should have added a condit ion in the agreement to meet the specific quality requirements which would mean that the ADS would have been under the obligation to meet the quality requirements, in this case military specifications. ADS on its part could have added a condition to have the payment made within a specified time length or added a condition would have required Bancroft to reject the products within a time period