Delayed shipment ST-204: choosing between discount and penalty
From: [email protected] To: [email protected] Subject: Order ST-204 / delayed shipment Dear Ms. Balkissa, We confirm your order of 1,200 cotton shirts (reference ST-204) at 8,000 FCFA each, total 9,600,000 FCFA, scheduled for delivery on 15 April. A power failure at our factory delayed production by eight days. We can ship on 23 April by road, with delivery in Niamey expected on 27 April. As compensation, we offer either a 4% discount on this invoice or a free upgrade to express courier for 300 shirts. Your contract provides for a 2% penalty per week of delay, capped at 6%. Please confirm your choice by 18 April. We value the relationship and regret the inconvenience. Karim, Sales Manager
1. What are the two options offered, and which is financially better for Niamey Retail? Show your reasoning.
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Options : (1) 4 % de remise sur la facture de 9 600 000 FCFA, soit 384 000 FCFA ; (2) upgrade express pour 300 chemises, valeur non chiffrée. Pénalité contractuelle : retard du 15 au 27 avril = 12 jours, soit 12/7 = 1,71 semaine ; 2 % par semaine = 3,43 % ; 9 600 000 × 3,43 % ≈ 329 000 FCFA, sous le plafond de 6 %. La remise de 384 000 FCFA est donc supérieure à la pénalité calculée, mais elle pourrait valoir renonciation à la pénalité. Recommandation : demander que la remise soit cumulable avec la pénalité ou, à défaut, négocier ; l'upgrade est intéressant si les 300 chemises sont urgentes. Il faut comparer le coût du retard commercial pour ces 300 pièces.
2. Draft a concise reply (60–90 words) accepting the discount, stating a condition about the delivery date and the penalty clause.
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Dear Karim, Thank you for your message. We accept the 4% discount on invoice ST-204, on the condition that the 1,200 shirts reach Niamey by 27 April at the latest. We also reserve our right to the 2% weekly delay penalty if the new date is missed. Please issue a written credit note and an amended delivery schedule by 18 April. We value the relationship and expect this commitment to be met. Best regards, Balkissa
3. Explain the phrase 'we value the relationship and regret the inconvenience' in terms of business tone, and identify one risk in accepting the offer without a written amendment.
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Tone : the phrase is polite and face-saving; it signals goodwill and a desire to preserve the commercial relationship after a failure. It does not, by itself, create legal rights. Risk : accepting the offer orally or by email without a written amendment may leave the delivery date, the discount and the penalty waiver unclear. The supplier could later claim that the 4 % discount replaced the penalty. Best practice : ask for a signed credit note, a revised delivery date, and an express clause stating whether the discount is in addition to or instead of the contractual penalty.