When two companies sign a contract, they legal accept that the terms of the contract must be followed. It is possible to change the terms of the deal if formal discussions are held and an acceptable amendment to the contract (or even a new contract altogether) is agreed to. However, no company can just unilaterally pull out of contract without cause and no company should allow a partner to flagrantly violate the terms of such a deal.
We bring all of this up in light of a revelation by the Chief Executive Officer of Sears, who has alleged that One World Technologies is attempting to “embarrass” Sears and use legal action to back out of or change the terms of the contract they have had together for nine years. Details are sparse here, so it isn’t exactly clear what the CEO is specifically alleging, nor is it clear what One World Technologies thinks of the issue (they declined to comment).
But what is clear is that these two companies — which have shared a mutual respect (at least so it seems) under the terms of this contract for nine years — are either nearing or are in a contract dispute.
Contract disputes can be a PR nightmare for companies. In addition, the legal consequences of the contract dispute need to be handled swiftly and appropriately. For companies in these unfortunate predicaments, legal counsel is necessary.
Source: Business Insider, “Sears tanks after CEO eviscerates top tool vendor he says is trying to cancel its contract,” Hayley Peterson, May 15, 2017