A strong contract can leave a business in an advantageous position. Purchase prices can be secured, consistent supply chains can be obtained, and new opportunities can be realized. Yet, these benefits are only brought to fruition when the terms of a contract are adhered to.
When one or multiple parties fail to abide by those terms, then opportunities can be lost and finances can take a hit. This is why properly addressing contract disputes is important. After all, it is often the only way for a wronged business to protect its financial interests and its reputation.
To see just how high the stakes can be in these matters, one need only look at a recent breach of contract lawsuit filed by a subsidiary of energy giant Chevron against a Baton Rouge-based foundation.
In the lawsuit, the subsidiary claims that it helped the Wilbur Marvin Foundation finance the renovation of the Hilton Baton Rouge Capitol Center, which is located downtown. As part of that financing, according to the lawsuit, the Chevron subsidiary had the option to purchase an interest in the property at a later date and for a lower price.
Problems arose when the subsidiary tried to exercise that right. According to reports, the Foundation's attorney refused the subsidiary that right, which is no small thing considering the property is now worth tens of millions of dollars. The Foundation denies the claims of breach of contract, claiming, amongst other things, that the property has already been sold to another party and therefore the subsidiary is not entitled to exercise its option.
This case is slowly winding its way through the court system, and it will be interesting to see how it turns out. In the meantime, Baton Rouge businesses should use this case as a learning opportunity to see just important contract language is for the parties that are adhering to it.