A well-written contract represents a tool that your company can use to safeguard its resources. All businesses encounter oral and written agreements between companies and individuals. While oral agreements are not encouraged, most businesses use formal written contracts before engaging in business. Written contracts provide a legal document that should unambiguously state the expectations of both parties and govern the resolution of contract disputes and negative situations. Contracts are generally legally enforceable in a court of law. As a result, contracts are strongly encouraged even among business partners that have worked together for many years.
Lord & Taylor and White Flint Mall have worked together since 1977. The parties had a rich history of business together and a contract that governed such business. However, last year Lord & Taylor filed a lawsuit against their landlord, White Flint Mall, claiming their lease was violated. Fortunately, Lord & Taylor had an enforceable contract in place to safeguard their store location. On Friday, a Maryland federal jury awarded Lord & Taylor $31 million for lost profits and store renovations, determining that the White Flint Mall had broken its lease by emptying the mall around the retailer to build a new development. The court held that White Flint Mall must honor the terms of their contract.
Lord & Taylor’s legally enforceable contract resulted in what Lord & Taylor believes to be the largest award against a defendant in Maryland’s Greenbelt courthouse. A careful review and critical analysis of your contracts can be time consuming and will generally incur legal costs and fees. However, your business lawyer can help you review available options, negotiate favorable contract terms, establish reasonable goals and objectives and safeguard your resources.
What does this all mean for the fashion world?
- All businesses in the fashion realm must carefully review their contracts.
- Keep proper records, including copies of your contracts and associated agreements.
- Seek the advice of counsel to ensure your practices and policies are consistent and compliant with applicable law.