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Florida hotel management change ignites breach of contract claims

When the owner of a property in Florida hires a company to maintain and manage the property, they may sign an agreement that defines what is expected of both parties during the period of the partnership. If either party breaks that agreement in any way, it may be considered breach of contract and the party that has been wronged has the option to pursue the matter in court. The court may then require both parties to meet their obligations, or may require the party breaking the contract to compensate the other party.

Tourism industry officials are concerned about the effect of a judge’s recent ruling that the property owner of the Ritz-Carlton could terminate his agreement with the company, and rename and take over management of the hotel. Although the takeover will be complete July 1, the owner stated that he plans to keep as many current employees as possible in order to smooth the transition period. 

The court battle has lasted two years, and although the judge allowed the owner to terminate the contract, this decision opened him up to a lawsuit by the company that alleges he broke his contract by taking over the hotel. The owner claims the company did not meet the contract’s obligations as far as performance, although the company disputes this claim.

Although the man owns the property, he entered into an agreement with the Ritz-Carlton Company that requires him to fulfill his obligations. If the company wins the countersuit, the owner may be required to fulfill his end of the deal or provide the company with compensation for profits they would have made had the contract not ended prematurely.

Source: The Palm Beach Post, “Ritz-Carlton Palm Beach to be renamed in owner takeover next month,” Emily Roach, June 11, 2013

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