Boston Breach of Contract Lawsuit Can Be Used as Leverage in Dispute

Breach of contract lawsuits in Boston sometimes have the effect of punishing a party to an agreement when the party failed to perform its promises under the contract, and when it further engaged in fraud or other deceptive conduct.

This can be a land transaction, purchase of another company’s product or a vast array of other types of business deals. Our Boston business attorneys recognize that business contracts are perhaps one of the most important aspects of a successful small business.
businessmen.jpg
While there are obvious needs, such as a solid idea, hard workers, flowing capital and other basics, a strongly written contract that accounts for potential loopholes and other issues can make all the difference in the world during a transaction. If the contract is written poorly, it can cost a company hundreds of thousands of dollars and lead to major lawsuits. No company wants those distractions.

In a recent case decided by the Worcester Superior Court, Regional Home Care, Inc. v. IKON Office Solutions, Inc., two companies sued each other for breach of contract, bringing up the question of whether suing for breach of contract can give a company leverage in a dispute. It is a strategic decision that could be useful on a case-by-case basis, but the company also runs the risk of filing an unsuccessful lawsuit.

In this case, a medical company filed a lawsuit, alleging that the company it was working with breached its contract for not delivering an archiving system that was promised. The defendant allegedly engaged in unfair and deceptive acts by breaching or threatening to breach other contracts with the company to gain leverage.

The defendant then counterclaimed, alleging that the medical company was the one that breached the contract for not making full payment and that they used their non-payment as leverage to obtain additional services from its company.

The dispute started when the plaintiff said the defendant breached its contract to redesign forms to include bar codes. There were discussions to redesign the company’s forms, but the defendant argued they were not made part of a final contract between the companies.

A court ruled that while the contract didn’t specifically state that bar codes would be included, the contract had language pointing to a “design document,” which included information about bar codes.

In a separate claim, the medical company said its business partner engaged in unfair and deceptive acts in violation of Massachusetts law and the judge agreed. According to a court ruling on the matter, the judge found that two company officials induced the plaintiff’s employees into signing documents they knew were false.

These documents dealt with milestone dates and projection information that said were completed, but actually weren’t. The judge awarded double damages and attorney’s fees in this situation.

In these kinds of cases, while lawsuits can sometimes be designed to cover the true events of what transpired with fancy wording, actual facts will be revealed and determine who was ultimately at fault. The judge in this case dismissed the counterclaims as well because the initial breach of contract is what set off the events that followed.

A Boston business law firm, The Brown Law Firm, LLC, has offices in Belmont and Boston. For a free and confidential consultation, call Attorney Graeme Brown at 617-489-0817 or contact us through this website.

More Blog Entries:

Patriot Beer Wars Illustrate Contract Dispute Issues Among Massachusetts Businesses: October 25, 2011

MBA
Boston Bar Assosiation