They All Look The Same To Me

So, it happened again yesterday. Someone (who agreed to let me tell this story on the condition I withheld the name - like I'm writing for the WSJ or something) came to me with a contract problem. The story goes like this: Client X is a widget distributor here in Florida. He buys his widgets from Supplier A, who is in Arkansas. The parties have a contract that Client X will serve as Supplier A's exclusive distributor in Florida. Client X's business is driven almost entirely by the revenue generated from its sales made on behalf of Supplier A.

Guess what happens? Supplier A finds someone else he likes better as a distributor and starts using Distributor B. Understandably, Client X is furious and scared. The prospect of losing an entire line of work is an awful prospect whether these be good times or bad. As a result, I get a phone call. I want to sue and I want it to be painful, Client X tells me. They knowingly breached my contract. I want damages for the loss of my business, the headache they caused me and the emotional distress. Translation: drive Supplier A into the ground.

This is tricky territory. Telling a client they can't have everything they want tends to make unhappy people even unhappy- er (assuming that's some kind of word). Of course, Client X has a cause of action for breach of contract. Of course, Client X can recapture lost revenue for the present and for some time into the future even. The whole purpose of a breach of contract action is to give you back the benefit of the bargain you made

The bad news - it doesn't matter that Supplier A did what it did with intent or on purpose. One breach is no worse or better than the other. They are all the same. In fact, the law honors the efficient breach of contract. If Supplier A found out that Distributor B could offer the same or better service for less, there might be perfectly good reasons to go with Distributor B. The law, however, says that Supplier A has to make things right with Client X.

By the same token, Supplier A may have no reason at all to choose Distributor B. The result, from a legal perspective, is the same. No extra points for malice here.