Business owners in Florida know that it is sometimes in their best interest to collaborate with other businesses. By doing so, both businesses are able to share both expenses and profits, while benefiting from the other’s brand power. Unfortunately, an agreement that was supposed to be mutually beneficial recently led to a breach of contract lawsuit being filed by Goodyear Tire & Rubber Co. against Sears Roebuck & Co.
In papers recently filed with a federal court, Goodyear claims that it entered into an agreement with Sears in 2009. As part of the agreement, Goodyear would manufacture tires to be exclusively be sold by Sears and its affiliates. The tires would display trademarks owned by each of the companies. Based on forecasts submitted by Sears, Goodyear manufactured approximately 200,000 tires that Sears no longer wants, which are valued at just under $19 million.
In April of 2014, Sears sought bids for its tire business, but, the lawsuit claims, continued to submit forecasts for tires to Goodyear. Although both companies apparently believed Goodyear would win the contract, Sears ultimately decided to go with another company. Because of the business agreement between the two companies, Goodyear cannot sell the tires to any company other than Sears or its related retailers.
Because of this alleged breach of contract, Goodyear claims to be left with thousands of tires that are reportedly worth millions of dollars. By taking civil action, as Goodyear has, a company not only has the potential of being awarded monetary damages, but could also discourage a business from engaging in similar act in the future. A Florida business that is suffering a comparative loss due to breach of contract can pursue a similar legal action for its case.
Source: tirereview.com, “Goodyear Sues Sears for Breach of Contract in Weatherhandler Tires Deal“, Nov. 4, 2014