While it’s always a good idea to put agreements in writing, taking that step isn’t always enough to guarantee that everyone involved will continue to abide by the terms of the contract, even if they all sign their names to it. When one or more parties violates the agreed-upon terms, you can sue them for breach of contract and get the court to issue an injunction requiring them to abide by the terms of the contract, but sometimes even that isn’t enough. Below are just a few examples of what can happen when people insisted on having it their own way.
A Salesman’s Gotta Sell
John Osborne worked as a salesman selling business forms for Uarco, Inc. The employment agreement he signed with the company included a non-compete clause that said Osborne would not sell business forms for any of Uarco’s competitors. After Osborne’s employment with Uarco ended, he went to work selling similar business forms for one of Uarco’s competitors. Uarco sued him for breach of contract and succeeded in obtaining an injunction from the court that, in part, forbade Osborne from reaching out to certain customers of Uarco for a period of two years. But the injunction had a loophole that let Osborne sell to a customer of Uarco if the customer expressed a desire to purchase business forms in an open bid situation (meaning different vendors submit a request for proposal and the customer goes with the lowest price).
Uarco then accused Osborne of being in contempt of court by violating the injunction when he contacted Uarco customers. When the court looked into the accusations, it found that Osborne had violated the terms of the injunction more than 100 times. Osborne admitted to contempt on two counts but claimed the rest of the customers did not fall within the limitations of the court’s injunction against him. The court disagreed and imposed further injunctions of an additional 190 days against him, as well as monetary sanctions.
Osborne appealed that decision and the case went before the Supreme Court of Kansas, which upheld the lower court’s ruling of the extended injunction and also awarded Uarco almost $10,000 to cover their legal costs in filing the lawsuit and arguing their case and an additional $10,000 fine. Continue reading