General

$14.2M judgment in contract dispute case

Contracts are a vital component to most businesses. Accordingly, when there are issues with a contract, whether it is a breach, or possibly a cancellation, a party may decide to take legal action. A lawsuit involving IBM Corp. and Carlson–a business that owns a marketing company, a restaurant chain, a couple of hotel chains and a travel company–was recently resolved.

The contract at issue, under which IBM was supposed to consolidate IT functions for Carlson, was originally signed in 2005. Despite intending to run for a total of 10 years, Carlson nonetheless terminated the contract after only five years, in 2010. During the course of the nine day trial conducted regarding the matter, Carlson’s current CEO indicated that the business’ financial state made it necessary to aggressively cut expenses such as the one with IBM.

The judge rendered his decision on the matter earlier this month. The decision left IBM with a $14.2 million judgment. In reaching this decision the judge specifically noted that though there were some transitioning issues after the agreement became effective, the contract termination was due to Carlson’s financial issues, not the performance issues on the part of IBM.

Contracts are used by individuals and entities of all sizes and types to help accomplish business goals. Regardless of the specifics, when one party fails to keep up its end of the bargain, a lawsuit such as this one could be filed. For the best outcome in any type of business dispute, it is a good idea to work with a business lawyer.

Source: Star Tribune, “IBM wins $14.2 million suit against Carlson over contract cancellation,” David Phelps, Aug. 8, 2014

Mon Aug 27, 1:48pm