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Dirty laundry: breach of contract

Contracts are an important part of almost every business in Florida. They help sell products, bring in money and set the operating rules for business. Contract disputes, on the other hand, can have the opposite effect on business. Without the right guidance, they can be time consuming as well as expensive, and can stop business. In some cases, a contract dispute can even lead to litigation.

These days, it appears that a contract dispute has done just that for one company. Zephyrs supplies Italian-made hosiery to larger businesses. The company has now sued retailer Victoria's Secret and its parent company Limited Brands Inc.

Zephyrs had written contracts with Victoria's Secret to sell high-end stockings. However, the company claims that Victoria's Secret broke these contracts in 2001. Instead of selling Zephyrs Italian stockings, Victoria's Secret replaced them with cheaper knockoff Canadian-made stockings. Furthermore, Zephyrs claims that Victoria's Secret kept the packaging the same to mislead consumers.

Ultimately, Zephyrs filed suit for breach of contract and unfair competition. The company is seeking $15 million in damages. In addition to the monetary damages, Zephyrs would like to recall several styles of the stockings that were sold in the misleading packaging.

If the parties are able to come together, there may be potential for a settlement. A settlement can be a cost effective way to settle disputes with business contracts. The process often allows parties to come to mutually agreeable terms and move forward with their business relationship.

Source: JD Journal, "Victoria's Secret in Hosiery Lawsuit," Aug. 29, 2012

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