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Pricing focus of contract dispute

Florida companies that routinely engage in sales contracts and other such agreements with suppliers or customers know the importance of well-drafted documents. A single contract dispute can cost a business a lot of money in legal fees and even lost business. It can also negatively impact a company’s industry and public reputation and contribute to lowered profitability in many ways. These situations can relate to a confidentiality agreement dispute, breach of contract or other topics.

This is happening in a business litigation case between a Tennessee-based company and its supplier that operates in both Florida and Georgia. The Florida company has experienced a dramatic drop in the value of its shares in the wake of the lawsuit announcement. In a matter of only two days, its share value plummeted by 56 percent from where it had been. The first day saw the biggest drop of 44 percent, followed by another 12 percent drop the second day.

The nature of the conflict focuses on product pricing. The customer wants the supplier to provide more detail about specific clauses in their contract. The goal is to get the supplier to adjust prices to meet those of other companies or let the customer out of the contract agreement so that they can purchase materials elsewhere. The supplied items are used to manufacture many different final products.

These types of business conflicts can arise even when a relationship has been positive and longstanding. For this reason, it is important that companies properly understand contract terms and have the right legal assistance through the process.

Source: Atlanta Business Chronicle, “Contract dispute clobbers company with big Georgia chemical plant,” David Allison, Aug. 20, 2015

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