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socrateaser
socrateaser, Attorney
Category: Business Law
Satisfied Customers: 37968
Experience:  Retired (mostly)
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In exchange for preferred pricing, my companied entered into

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In exchange for preferred pricing, my companied entered into an arrangement with another company to acquire services from one another in a bill-and-keep (net payment zero). This worked well until the other company began slowly canceling services and not replacing those services.   Each time we would raise concern, they would state that their clients had cancelled their service and didn't have any opportunities at the time. Eventually, it became apparent that they were purposely doing this and had begun to procure those services from the sources that we purchased those elements from. Since there were no formal contracts in place, we eventually ran into a situation where we began to acquire considerable debt as a result of this relationship and began to have difficulties remitting payment yet they refused to allow us to transfer or cancel those services until signed a letter of understanding. We were not able to full the entire agreement and they are now claiming breech. Any recourse?
Submitted: 7 years ago.
Category: Business Law
Expert:  socrateaser replied 7 years ago.

Yes, you can counterclaim for breach of the implied covenant of good faith, which means that the other party has taken steps to prevent you from obtaining the benefit of the bargain. The original agreement was an exchange of what was expected to be reasonably equivalent value for services rendered.

 

However, when the other party, stopped accepting your services, and procured them elsewhere, they obtained an unfair advantage, and breached the covenant of good faith that contemplated the equivalent value of services under the agreement.

 

If you win that claim then you would have damages for the lost profits from their taking their business elsewhere, and for reliance upon their misrepresentations, which could give you damages for what you would have received had they not diverted their purchases.

 

Hope this helps.

 

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