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Macy's sues Martha Stewart for breach of contract

As anyone who engaged in a business is aware, there are many moving pieces that all work together to make it successful. This does not change once a business has been in existence for a while. Necessary pieces to virtually every company, regardless of its size or type, are contracts. While the drafting of certain agreements can be complicated, resolving disputes that arise due to breaches are often even more complicated. A contract dispute that has been receiving attention lately is one involving Martha Stewart and the two department stores she currently sells some of her products through.

Macy's, with which she has been since 2007, filed a breach of contract lawsuit against her in 2012 due to department store competitor, J.C. Penny's, carrying some of her products for the home. J.C. Penny's beginning carrying her line of products in 2011. In a world where many department stores are struggling, Macy's indicated that a competitor carrying her products could lead shoppers to go elsewhere to purchase the home goods. Prior to either of these agreements, Stewart's products were sold at Kmart.

The case has worked its way through the system and the home maven recently testified in the matter. In her testimony she indicated the heart of the lawsuit is a difference in understanding the parameters of the contract her company has with Macy's. Stewart disagreed with Macy's contention, indicating it is her belief that most shoppers have a sense of loyalty to the stores where they shop. She also indicated that the sale of her merchandise at Macy's had been on a much smaller scale than she had anticipated.

The sooner a contract dispute is resolved, the better it is for the businesses involved. This is because in addition to any sales that may be lost, the businesses are also spending money by defending the case. While in some cases such a dispute can be resolved via negotiation, in others, such as this case, it will go to trial.

Just how this contract dispute will ultimately be resolved remains to be seen. We will certainly post updates on the matter as they become available.

Source: New York Times, "Martha Stewart Back in Court in Contract Dispute," Stephanie Clifford, March 5, 2013

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