Round 3 6th May – 2013 Parties A – Alex & Jamie Party B – Pete & Chris BACKGROUND Alex, Jamie, Pete and Chris have been best friends since Primary School. They have all grown up together and also attended the same High School and University. The four friends always dreamed of opening their own business and even made sure the degrees they studied for would fit in well for them to accomplish this dream. Alex and Jamie had both studied Graphic Design, Pete studied Marketing and Advertising and Chris became an Accountant and studied Business Management. The four friends felt that starting an Advertising Agency was going to be the best way to begin a successful business. With Alex and Jamie would be the creative designers, Pete would be able to do all the marketing and Chris would be the behind the scenes daily running of the business. Throughout their degrees the four friends all did everything they could to make sure they were fully prepared to open their business upon graduation. The four friends all made sure they took all the work experience opportunities that were available, and made numerous business contacts along with this. They spoke to as many professionals in their respective fields to try and learn as much as possible. All this extra experience gave the four friends the confidence to put together a business plan that was going to make their dream a reality. They decided to show this plan to Alex’s father who as a bank manager would be able to help guide the friends into the best way to successfully be able to apply for finance for their business. The four friends new that they would never be able to fund the business themselves and they would need a business loan in order to get the business off the ground. Alex’s father was impressed with the business plan the friends had put together and it was obvious how much they had really thought this through and how much work was going into the business. He agreed that provided all four friends graduated then he would act as guarantor for the business loan to help make sure the friends secured the beginning of their dream. All four were excited about the idea of having finance secured for their business, now they could really start the planning. The next major step they needed was to find the perfect location for their business. Chris remembered that his/her Grandparents owned a number of office spaces in the city centre, so he/she suggested that the friends put their business proposal to his/her grandparents to see if they had any suitable properties. The four friends put their business plan to Chris’ Grandparents who were also incredibly impressed with the proposal and suggested they had an office that had been vacant for a while and they would be willing to rent this to the friends at a very reasonable rate as there was a lot of work to be done to the property. In fact if the friends were will to do the work, they could have the property free of charge for the first six months. Page 1
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THE INCIDENT Pete and Chris had both finished their studies and spent every day at the office and were impressed with the improvements they had made. Alex and Jamie still had not finished their studies and did not spend quite as much time at the office, although all four friends knew that if Alex and Jamie did not graduate then their dream would not come true. Whenever they were not studying Alex and Jamie were also at the office and it was agreed that no major decisions about the office would be made without all four of the present. The office renovations were almost complete and the final touches such as paint, carpet and office furniture were the last decisions to be made. Alex and Jamie had not been to the office in over a week, and although they kept agreeing to come in so the final decisions could be made, they continued not to show. Pete pointed out how important these decisions were and Alex promised that both he/she and Jamie would be there the next day. The next day, Pete and Chris were waiting for Alex and Jamie to arrive at the office so they could go down the road to the Homemakers Centre and make a final decision on the carpet and paint colours they were going to use for the office. A number of colour schemes had been discussed and all agreed that the colours of the office would need to match the company logo, which was still to be decided upon. There had been a few rough drafts of the logo, however nothing final had been decided on. After waiting over two hours for Alex and Jamie to arrive, Pete had finally had enough. If the paint and carpet were not chosen then the office would never be ready to open on time. Pete suggested to Chris that they go and at least have a look at paint and carpet samples. Chris was a little reluctant, but figured just looking and getting some samples and prices couldn’t hurt. The sent a text to Alex and Jamie to let them know what they were doing and headed down to the Homemakers Centre. When they arrived at the Homemakers Centre Pete and Chris went straight to the Carpet and Paint Depot to have a look at some design ideas and colour schemes. They were overwhelmed with all the choices that were available, however when Pete noticed a display area with a number of office layouts both were drawn to the display that consisted of red carpet, white walls and black furniture. Not only did it look very professional, but black, red and white was one of the colour schemes the group kept discussing. The sales representative came over to talk to Pete and Chris and mentioned that they were having a sale on all items on display. The red carpet was almost at cost price and when Chris mentioned how much they needed for their office, the sales rep confirmed that they had enough in stock to cover the office and that if they ordered the paint as well, then they would throw in the furniture. Pete and Chris could not believe their luck, they could have the whole office painted, carpeted and all furniture for the reception/waiting area for less than half of what they had budgeted for. The sales rep also mentioned that furniture that matched the display was also available for the individual offices and that if all was ordered today then he would be happy to try and arrange for a discount with the furniture company. Page 2
The Law Society of NSW - Mock Mediation, 170 Phillip Street, Sydney NSW 2000
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Pete and Chris asked for a moment to discuss the idea and both agreed it was amazing value. Pete suggested that all four friends had said that black, red and white would be a good colour combination for the business and that as budget was a major factor in all their decisions this was a very smart purchase. While Chris agreed he/she was reluctant to make any decisions without Alex and Jamie. They tried to call both Alex and Jamie but did not get a response, so left messages and sent texts to tell them to phone urgently. Both Pete and Chris waited patiently for a response and when they had not heard anything after an hour, they went back to the sales rep and confirmed the purchase. The following week, Alex and Jamie both walked into the office to find the carpet being laid. They called out for Pete and Chris however they were informed by one of the carpet layers that they were not around. Alex tried to phone both of them but there was no answer. Alex and Jamie were waiting outside the office both furious that decisions had been made without their input. They had all agreed that the four of them would make all the important decisions, and the design of the office was definitely a very major decision that was to be made. When Pete and Chris finally arrived back at the office, Alex started yelling at them both. How could they have made the decisions on furniture without either him/herself or Jamie being consulted? Pete was trying to explain that they had to decide that day and the deal was amazing but Alex would not listen, he/she just continued to yell. As Alex was yelling, a delivery van pulled up and all the furniture that had been ordered was being delivered. As Chris signed for the delivery, Jamie was telling the driver to return all the furniture, but the driver replied that he was there to make the delivery and any returns would need to be discussed with the head office. Page 3
The Law Society of NSW - Mock Mediation, 170 Phillip Street, Sydney NSW 2000
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THE AFTERMATH Alex and Jamie were furious, not only had Pete and Chris decided on the furnishings for the office, but they had also decided on the colour scheme for the whole business. To make it worse, the furniture they had selected for their offices was totally unsuitable for design work. If Pete and Chris had bothered to check this instead of just being selfish and thinking of their needs then this problem would never have happened. Alex was demanding that Pete and Chris arrange for all the furniture, carpet and paint to be returned. Pete pointed out that returning carpet that had been laid and paint was unreasonable and impossible and that if Alex and Jamie had been around more often then they would have been more involved in the decisions made. Chris thought Alex and Jamie were being unreasonable and pointed out that they had done very little of the hard work that had been involved in getting the office even ready for the carpet and paint. It was not like Chris and Pete had designed the business name or logo, all they had done was buy some furniture which had saved the four of them a lot of money. With money being so tight Chris felt Alex and Jamie should be grateful. Pete was very hurt by the outburst by Alex and Jamie and especially when Jamie told the delivery driver to return the furniture. The four of them yelling outside of the office made them all look very unprofessional. How could they convince anyone to do business with them when half the town saw them all fighting. If Alex and Jamie had any problems they should have discussed them privately, and the fact that they responded by yelling, left Pete wondering if he/she even wanted to go into business with them. The four friends were barely speaking to each other and they could not be in the same room without an argument taking place. The office had been left untouched since the furniture delivery, leaving the walls half painted and all the furniture stacked in the waiting room. Pete was refusing to discuss the business and the longer the friends held off on deciding on the business name, logo, and stationary and how to advertise the opening, the more it looked like the business would fold before it even began. Having agreed to guarantee the business loan for the four friends Alex’s dad was very worried about the situation. Not only had the four been friends since they were in primary school, but there was a lot of money involved. With both friendship and money at stake Alex’s Dad suggested the four friends try mediation to see if they could work things out. He had seen mediation be very successful during a number of business ventures and firmly believed the four friends could benefit from it. Not wanting to disappoint he/her Dad Alex agreed, Chris also agreed as he/she did not want to let his/her Grandparents down. Jamie felt the four of them could all benefit from at least trying to talk through their problems and also agreed to attend. Pete did not see the point of mediation and thought it a total waste of time, however very reluctantly agreed to attend. Page 4
The Law Society of NSW - Mock Mediation, 170 Phillip Street, Sydney NSW 2000
T: (02) 9926 0253 F: (02) 9231 5809 E: [email protected]
www.lawsociety.com.au