Describe what this contract is really all about – what is going on between the two parties? (12points)
What is going on between the two parties is that Barnes and Noble Bookquest (BNBQ) and Alibris have entered into a dealer direct program agreement. Under this agreement, BNBQ would purchase used and hard to find books directly from Alibris. Alibris in agreeing to enter into this agreement with BNBQ wants to participate in the BNBQ Dealer Direct Programs a service commissionaire, and as a service commissionaire, Alibris shall facilitate the sale of Used & Out of Print Books by Alibris Dealers under the terms set forth in this Agreement using the BNBQ Dealer Direct Program (http://sec.edgar-online.com/2004/04/20/0001047469-04-012705/Section3.asp).
In the contract there are a number of terms that have been deleted and replaced with [***]. Discuss why a party may want to keep portions of their contracts confidential. (6 points)
A party may want to keep portions of their contracts confidential to protect the interest of the parties that are concerned with the contract. Often, especially when documents are made readily available on the Internet, parties in a contract do not wish to have certain aspects of their company made public knowledge. One example would be if Ben and Jerry were to enter into a contract with a franchise ice cream seller. They might omit portions of the contract that would talk about any recipes that they have proprietary rights to in the public document of the contract. In the case of BNBQ and Alibris, the parties wish to have the actual percent values of the list price that is to be obtained by the participating dealer (BNBQ) to remain confidential. This is the case because BNBQ doesn’t want any rival companies that might read this public document to undercut what they may offer a company such as Alibris in the book selling arena (http://sec.edgar-online.com/2004/04/20/0001047469-04-012705/Section3.asp)
Read Section 15.7 and 15.8. Why are these important clauses to have in a contract? Knowing what you know about ADR, is there anything missing? (12 points)
Clauses such as 15.7 and 15.8 are important to have in a contract so that both parties understand the legal ramifications that both parties of the contract will be subject to in case there is a need to involve a court of law. In the case of this contract, section 15.7 clearly lays out that if legal proceedings are needed then both BNBQ and Alibris that those proceedings will take place in the state of New York. This is an important section because it means that one party can’t decide to file suit in a state such as California where the laws pertaining to a contact such as this might favor one party of the contract over another. By utilizing section 15.7, this contract holds that if a court of law is needed, then those proceedings will take place in New York and both parties will be held accountable by New York contractual laws. Section 15.7 also clearly spells out that if such court room proceedings are needed that both parties waive their right to trial by jury, thus insuring a speedier conclusion of those proceedings. Section 15.8 is an important clause to have in a contract because it allows for a third party to step in and help mediate a resolution to the breach of contract if it arises. By utilizing this section, both parties are assured that a unbiased third party will be called in to negotiate in the event that it is needed. This is essential to have in places so that both parties do not feel that they are being robbed of their rights in a contract such as this. In looking at these sections, and keeping the tenants of ADR in mind, section 15.8 says that when using a mediator both parties agree to sit down with the mediator. The wording of the section does not mention how the mediator will bring about the resolution of the situation According to the tenants of ADR, it is very important that the mediator only facilitates the resolution of the situation. The word facilitate is a necessary nuance that was omitted from this contract and leads the reader of the contract to wonder how the American Arbitration Association would bring about the resolution of the dispute (http://sec.edgar-online.com/2004/04/20/0001047469-04-012705/Section3.asp)
Review the following web pages:
Given the nature of each of these businesses, discuss why you think each would want to be a party to this contract (12 points):
In looking at the Alibris website, I think they would want to enter into a contract such as this to further be able to offering the customers that use their service a wider range of sellers to access. According to the site, Alibris connects readers with the books, movies, and music that they love by offering to connect them thousands of independent sellers around the world. By joining the Barnes and Noble family, Alibris would be adding to the thousands of independent sellers that they can offer their customer access to. Also, Alibris gains the advantage of saying that they are part of the Barnes and Noble family which is additional feather in their cap so to speak (http://www.alibris.com/about/about-home.cfm?S=R)
Barnes and Noble Book Quest would want to enter into this contract as another avenue to offer their customers to find rare and out of print books. In an economy where the customer is looking for the person who can offer the most services and ease of buying, it behooves Barnes and Nobel to add a company like Alibris to their entourage of services. Alibris is a successful company that has a high return rates of customers because they are able to find many rare and out of date books through their network of independent sellers. I think also that Barnes and Noble also would rather have Alibris as a part of their network of sellers then working against them so to speak. It is like the old adage says, it is better to work together then work against one another. In entering a contract with Alibris, Barnes and Noble is adding another successful company to their umbrella of sellers (http://www.barnesandnoble.com/used/help/authsell.asp?z)
The Agreement has a number of Exhibits which seem to deal with very detailed and small issues. Why would it be important for Barnes & Noble to have these exhibits? (8 points)
It would be important for Barnes and Noble to have these exhibits to clearly spell out in detailed terms what is expected from their end of things. It may seem unimportant but in the publishing world something like what the requirements of the Alibris Database System is in context of this contract and the dealing between the two companies is very critical. Barnes and Noble by utilizing these exhibits are clearly stating what the requirement their system has and what they require from the Alibris system. It is also important to have these exhibits so that down the road there is no confusion as to who is responsible for what. Take the shipping fee exhibit for example. If Barnes and Noble did not clearly spell out the shipping fee, then two or three months down the road Alibris could decide that instead of charging them ten dollars to ship a book, they may want to charge twenty dollars. By expressly stating what the shipping fee is, Barnes and Noble stops Alibris from charging a different fee. The exhibits also help Alibris in that once stated in the exhibit, Barnes and Noble can not charge other fees for their parts of the service that they will provide to Alibris as per the contract. In the end, Barnes and Noble uses such exhibits to provide protection and clear requirements of both their part in the agreement and what they expect from Alibris (http://sec.edgar-online.com/2004/04/20/0001047469-04-012705/Section3.asp).