Contracts are an important part of any business deal. Even if individuals trust the parties they intend to work with, having the terms of the relationship in legally-binding documents can better ensure that everyone understands what is expected. However, even with contracts in place, all parties may not abide by the terms, and when a breach of contract occurs, companies may need to take legal action to address the problem.
California readers may be interested in a recent lawsuit filed by Yum Brands against Grubhub. According to reports, Yum believes that Grubhub breached the terms of their business contract by creating a new pricing structure without prior notice. The increase, according to Yum, will cause an approximately 40% increase in fees to consumers who order delivery of Yum’s products through Grubhub.
The issue does not end there, however. Grubhub has made claims of its own that Yum breached an exclusivity agreement by working with other delivery services. Yum argues that working with other services was permitted as long as Grubhub was allowed to maintain exclusivity with particular restaurants, like Taco Bell and KFC, when it comes to advertising.
Having multiple claims is not unusual when companies find themselves in legal disagreements. A breach of contract can cause numerous issues for the parties involved, including damages to the way the company operates and the revenue and other benefits generated by participating in the business relationship. If California companies have faced similar issues in which contract terms were not honored, they may want to thoroughly assess their legal options to determine how to best protect their interests.