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Disputes In The Legal System Essay Research

Disputes In The Legal System Essay, Research Paper

Midterm Paper

20 October 1997

Law, Politics & Society

Businesses are formed to make money. In the pursuit of making money, businesses deal with consumers and customers and other businesses. In all things in life when you have more than one individual or entity there will be some form of dispute that will arises in the course of time. This paper will focus on purchasing agents and insurance claim agents on why they avoid conflicts in the courts. It will also address how purchasing agents and insurance claim agents access disputes, how they handle disputes and what their objectives are in avoiding such disputes.

In all businesses one has to look at the bottom line. How does the business make money in the most productive manner? The usual way is that the business produces a product, markets that product and sells that product to a consumer. When the consumer purchases this product they enter into a contract, usually written, with the business. Stewart Macaulay states there are two distinct elements of a contract, “Rational planning of the transaction with careful provision for as many future contingencies as can be foreseen, and the existence or use of actual or potential legal sanctions to induce performance of the exchange or to compensate for non-performance.”

The paradox of the contract is that it is rarely enforced in a court of law. For example Lawrence H. Ross states that 98% of bodily injury claims in New York are terminated without adjudication by a court. In a survey in 1980 conducted by Richard E. Miller and Austin Sarat in the areas of South Carolina, Eastern Pennsylvania, Eastern Wisconsin, New Mexico and Central California there were only 8.9% consumer grievances filled out of 5147 households surveyed. This suggests that businesses do not like to enforce their contracts but to negotiate with the consumer.

There are different ways how businesses access disputes. Discussion will only be focused around purchasing agents and insurance claim agents. Purchasing agents access their disputes in three ways. Customer satisfaction, business relationships and longevity of said relationships. All businesses want to produce a product that fits the needs of the consumer, which enables the company to make money. If the purchasing agent is not happy with the product then more likely the case the purchasing agent will find another supplier. Stewart Macaulay states, “Both business units involved in the exchange desire to continue successfully in business and will avoid conduct which might interfere with attaining this goal.” He goes on to say, “People in a sales department oppose contract. Contractual negotiations are just one more hurdle in the way of a sale. Holding customers to the letter of a contact is bad for “customer relations”. Suing a customer who is not bankrupt and might order again is poor strategy.” It all boils down to this, if the customer is happy with his purchase then that customer will use that company again which means that the business will make money. The only time a purchase agent will file a legal complaint is if the customer is going out of business or is going bankrupt.

The insurance claim agent access disputes in a different manner. To the insurance claim agent it depends on the size of the claim and the individual. Lawrence H. Ross explains, “In small claims, a fair number of denials are successfully made. The adjuster rationalizes his actions on the basis of formal law and the company is shielded from reprisals by high processing cost for the claimant relative to the amount at stake. The adjuster closes his file by denial when he feels the formal law warrants this and also that the claimant will take the case no father. When he believes that the formal law favors the claimant, and thus finds himself ethically obliged, or when he believes the claimant is determined to press the claim, a payment can be made of considerable magnitude relative to the economic loss involved…In claims based on large loses, the claimants threat to litigate becomes more creditable, and denial thus becomes more difficult.” Lawrence H. Ross goes on and explains that settlements are also favored by how affluent, educated, and what race you are. For example a whit male that has graduated from college is more likely to achieve his claim than an individual with no high school education and is a minority.

When the purchasing agent and insurance claim agent recognize disputes they are handled in different ways. The purchasing agent will handle the disputes in negotiations or as far as waiving the contract agreement in favor of maintaining the business relationship. The purchasing agent will only resort to litigations when all other options have been exhausted. The insurance agent handles disputes in a wholesale approach. The insurance agent is looking for what is best for the company, which does not always coincide with what is best for the customer. Lawrence H. Ross sums it up nicely, “The company – like a casino, which is able to translate a large number of gamblers into mathematical certainty – is indifferent between these outcomes and can demand a concession for the definite settlement.” That is to say, because the insurance agent knows which files to drop and which ones he has to pay out, he will make money for the insurance company in the long run. Also the insuranc

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Рефераты по английскому языку Disputes In The Legal System Essay, Research Paper Midterm Paper 20 October 1997 Law, Politics & Society Businesses are formed to make
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