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All Press Releases for January 29, 2014 »
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Settlement ends contract dispute between Macy's and Martha Stewart

The settlement of contract claims between Macy's and Martha Stewart shone a light on high-stakes business disputes and litigation.
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    January 29, 2014 /24-7PressRelease/ -- Settlement ends contract dispute between Macy's and Martha Stewart

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The settlement of breach of contract allegations brought by Macy's Inc., against Martha Stewart Living Omnimedia Inc., (MSLO) has brought global attention to the high-stakes financial implications these cases can have. Macy's brought claims against home-design guru and media mogul Martha Stewart - centered around her collection of house wares and bedding being sold at rival retailer J.C. Penney's - in early 2012, alleging that Stewart, by selling her products at Penney's, violated an exclusivity agreement they signed with her company back in 2006.

Stewart's company was accused of breach of contract, while Penney's was accused of contract interference for signing a contract with Stewart (since her company already had an exclusive relationship with Macy's).

Penney's never sold Stewart's items with her name attached, instead releasing them as part of their own "J.C. Penney Everyday" line, but Macy's asserts that since Stewart designed the items, Penney's is still interfering in their exclusivity contract with Stewart's company. Macy's has expressed their intention to continue their legal fight with Penney's so long as any of Stewart's products are sold there (Penney's has now stopped selling the majority of the products, now only stocking window treatments, rugs and holiday decor). Penney's has also shortened the length of their agreement with MSLO, and will only be selling Stewart's products until 2017, four years sooner than originally planned.

Nevertheless, Macy's hasn't publicly backed down from their claims against Penney's, nor have they given any indication that court-ordered mediation has been helpful to resolve the dispute.

"Real-world" applications

Clearly, the high-stakes case involving MSLO, Macy's and Penney's is a unique one, involving companies with combined yearly sales of more than $500 million. It does, however, share similarities with smaller-scale business litigation issues. For example, it is common for delivery delays, payment issues, broken merchandise or other problems to arise when two parties (be they businesses or individuals) contract with one another. In legal parlance, a failure to meet the proscribed terms of a contract is known as a "breach."

If a breach of contract is significant enough to materially alter its ability to be fulfilled, litigation might be necessary to recover damages associated with the failure to perform. In such instances, it can be helpful for an experienced business law attorney - familiar with the legal concepts associated with contract performance and breach - to handle settlement negotiations on behalf of each party.

It may be possible for skilled attorneys to avoid full-on litigation by resolving the matter before it is necessary to appear in court, just as the one that occurred between Macy's and Martha Stewart Living. Though the case between those two retail businesses dragged on for nearly two years, the parties were able to reach a settlement, saving them both time and money that would have been expended in litigating their dispute.

Does your business have a breach of contract issue? Do you need help with another aspect of business law, like formation of a new business, dissolution of an existing one or intellectual property matters? If so, contact a business law attorney in your area for more information about your legal rights and options you have to protect your interests.

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