While the following story isn’t happening in this country, it is still an important news story that highlights some critical aspects of contracts and contract disputes. This story is from Canada, where the management company for public transportation for the Greater Toronto area tried to cancel a contract they had with a rail car manufacturer from 2010.
The public transportation company, Metrolinx, wanted to cancel the contract they made in 2010 with Bombardier. They ordered 182 rail cars, but Metrolinx claims that after numerous delays and contractual discrepancies, they had enough of Bombardier. They attempted to cancel the contract, but a Superior Court ruled against them. The contract will remain intact.
When a business partner in a contract fails to live up to their duties and doesn’t fulfill the contract (or violates the contract in some way) then it is important to hold that company responsible. There are legitimate reasons to dispute a contract, and when these situations arise you can’t, as a successful business, let another company get away with it.
However, the other side of the coin is that if a company disputes a contract, they should have legitimate reasons to do so. When they fail to substantiate their claims, then the other company (or companies) involved in the dispute deserve to have a contract reinstated or for the contract to remain intact. Contract disputes are touchy subjects in the business world, and they must be handled appropriately.
Source: Reuters, “Court sides with Bombardier in Metrolinx rail contract dispute,” Allison Lampert, April 15, 2017