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Case study Green Hills Coffee

1

An Englishman doesn’t need to sign a contract: if he makes a promise he will keep it. A verbal agreement without a signed contract is completely worthless.

Many cultures still value a personal relationship much more highly than a contract: in other situations it would be foolish to rely on a ‘gentlemen’s agreement’.

2

1. 
   Granos Cabrera are in breach of contact. Green Hills is under pressure from fair trade brands and cannot afford to be associated with borderline ethical practices.
   
2. 
   The CFO wants Fiona to enforce the terms of the contract or change suppliers.
   
3. 
   Her father had a special relationship with the Cabrera family and overlooked certain problems.
   

4 Clauses 3.1, 3.2, 4.1, 4.2 and perhaps 4.3.

3

	Fabio	Magda
Opinion of Gordon Hills	good and generous man	a clever businessman
Opinion of Fiona Hills	very fair, a good manager	only interested in the bottom line a good negotiator
Reasons for Granos Cabrera’s problems	problems are due to world market prices	Green Hills pay less every year
Solutions to Granos Cabrera’s problems	Fair trade, going organic	Green Hills should pay for fair trade certification, lend some money

5

The first email is to Granos Cabrera from another coffee distributor, offering better

terms than Green Hills, and help to expand production.

The second email is to Green Hills from another grower, offering better quality, organic

and fair-trade certified coffee beans at a competitive price.

They give each side an alternative to a negotiated agreement.