Mr Buckley is the managing director of Liverpool Philharmonic. After a long, competitive tendering process, he agrees with Mr Katsuhisa, a television producer, to perform the Brahms third sy
SCENARIO: Buckley v Katsuhisa
Mr Buckley is the managing director of Liverpool Philharmonic. After a long,
competitive tendering process, he agrees with Mr Katsuhisa, a television producer, to
perform the Brahms third symphony in the annual BBC Prom. Although Mr Katsuhisa
has far too much experience of in the television producing industry to believe that the
lowest tender is necessarily the best tender, he did choose Liv Phil because they have a
good reputation and are the cheapest.
Mr Buckley begins the rehearsal for the overture and Brahms 3. But when he begins to
do the accounting, he finds, to his great concern, that he had not included the
concertmaster and the conductor. Mr Buckley’s admin department simply made an error.
Although it missed just two persons, it is a serious matter as they have invited Valery
Gergiev as conductor and Daishin Kashimoto as concertmaster. The two giants in their
field get paid significantly more and the actual wage for all musicians will require
approximately ?50,000. The extra expense will negate the profit Mr Buckley intended
to make in order to sustain the orchestra by this performance. The salary for Valery
Gergiev and Daishin Kashimoto is ?14,000 and ?10,000, respectively.
Mr Buckley brings the matter to Mr Katsuhisa’s attention and asks that the wage be
updated to reflect the correct payment. However, the contract makes no express
provision for adjustment in circumstances like this and Mr Katsuhisa is very disinclined
to increase the price in order to deal with what he sees as a perfectly avoidable error.
Mr Katsuhisa tells Mr Buckley he will not adjust the price and recommend Mr Buckley
to hire some average conductor and concertmaster with some average wage. Mr
Buckley immediately threatens to perform without the two celebrities. Bound by the
rules of the BBC, Mr Katsuhisa will have to run the entire tendering process again and
he is unsure whether other orchestra will bid given the pressing date. He therefore tells
Mr Buckley he will make the agreed payments whilst they rehearse and will pay the
extra after the prom.
Mr Katsuhisa makes the stipulated payments but, after the show, refuses to pay the extra.
Questions:
What is the issue?
What is the Agreement between Mr. Buckely and Mr. Katsuhisa?
What is the financial impact of the error made by Mr. Buckely admin department and the importance of having Valery Gergiev and Daishin Kashimoto perform to maintain Liverpool Philharmonic’s reputation as a world class orchestra?
What are the potential consequences of canceling the performance and the impact on Liverpool Philharmonic and Mr. Katsuhisa’s reputation.
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