Martha Stewart is back in the news again. Fortunately this time she is not involved in a criminal case.
Instead, Macy’s Inc has brought a civil lawsuit against Stewart and her company Martha Stewart Living Omnimedia Inc (MSLO), for breach of contract after Stewart’s company allegedly entered into an agreement to sell product’s at store’s run by rival J.C. Penney, according to Yahoo News.
Macy’s is of the position that Stewart granted it the exclusive right to sell and manufacture certain products according to a 2006 agreement.
Nonetheless, in December, J.C. Penney unveiled its plan to open shops that sell Martha Stewart’s branded goods beginning in 2013.
Macy’s seeks a preliminary injunction against Stewart to stop her from allegedly violating the contractual provisions. It also seeks to have the lawsuit and motion sealed in an effort to prevent certain information from being disclosed.
As a result, the filing with the New York state Supreme Court does not provide a detailed look at the products at issue.
Macy’s also claims that it had renewed its agreement with Stewart giving the company the exclusive right to sell certain Stewart products such including cookware, kitchenware, and bed and bath products until 2018.
A company statement from Martha Stewart living mentioned Macy’s intent “to extend its commercial agreement with MSLO to feature and promote the Martha Stewart Collection– its #1 home brand–in Macy’s stores.”
Accordingly, this case seems to be your classic he said she said breach of contract case. Macy’s is of the position that the exclusive rights deal had been renewed through 2018, while it seems that Stewart believes that the deal did not confer exclusive rights upon Macy’s according to MSLO’s statement.
If the case does not settle and the court eventually makes a ruling the most important piece of evidence will be the contract or exclusive rights agreement. As these are two sophisticated parties no judge is going to feel that either lacked significant bargaining power, which could potentially render a deal unfair.
Thus it will be interesting to see how this case plays out in the upcoming months. But, if the allegations are true it seems that Macy’s should have a pretty strong case.
What do you think?
