Your sales distribution agreement is undoubtedly a very important contract to you. Whether you are the manufacturer or the distributor, these agreements can be vital to the success of your business. It stands to reason, then, that a breach of the agreement by the other side can be devastating to your business. Generally, proof of a breach will only entitle the injured party to monetary damages although, in some narrow circumstances, an injured party may be entitled to an injunction. To learn more about your array of options if you’ve been harmed by the breach of a commercial agreement, talk to an experienced South Florida commercial litigation attorney about your case.
One recent South Florida case offered a real-life example of a scenario that did not warrant an award of injunctive relief. On Jan. 1, 2017, a medical device company entered into an agreement with a distributor of medical devices. The agreement called for the latter to become an exclusive distributor of the former’s products in a specific sales territory for a period of five years. The agreement contained a clause that barred the distributor from selling products or services that the manufacturer considered to be in competition with its own.
Almost 12 months later, the two entities wound up in court. The manufacturer accused the distributor of breaching the contract. The manufacturer alleged that the distributor tried to unilaterally cancel the agreement and also solicited business on behalf of one of the manufacturer’s chief competitors.
In some situations, an injured manufacturer like this one might simply seek to litigate and collect an award of money damages. In other circumstances, though, a manufacturer might desire to go further. This manufacturer asked the trial judge to enter an injunction. That order would have essentially forced the distributor to perform as it had allegedly promised in the contract. That would have meant exclusively selling the manufacturer’s products for four more years, including enforcing “it and its employees’ non-compete obligations.”
The trial court refused to grant the injunction. Injunctions like the one this manufacturer sought can be hard to obtain. To succeed, the party seeking the injunction has to prove to the court that an award of money damages, regardless of the amount of those damages, could not possibly compensate it adequately for the harm it would suffer if the defendant was not enjoined from engaging in the conduct at issue. That can be challenging to establish, and this court determined that this manufacturer had fallen short. The manufacturer had not clearly shown that money damages were inadequate, so an injunction wasn’t proper.
The manufacturer did not have the proof it needed, so it could not obtain the injunction it desired.
For advice and advocacy upon which you can rely regarding your commercial contracts, and potential breach of contract litigation matters, talk to the skilled South Florida commercial litigation attorneys at Stok Folk + Kon. Our experienced team has been skillfully helping clients protect their business interests for many years.
Contact us online or by calling (305) 935-4440 to schedule your consultation and find out how this firm can help you.
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Contractual Limitations Period Stymies Swiss Trust’s Breach of Contract Lawsuit Against American Bank, Florida Business Lawyers Blog, May 7, 2018
Florida Licensor and North Carolina Licensee Battle Over Admissibility of Experts in Cold Fusion Reactor Case, Florida Business Lawyers Blog, April 20, 2018