Many businesses throughout California contract with other companies to lease equipment needed to run their businesses. Typically, one company agrees to provide certain equipment for a specified time in exchange for monetary compensation from the other party. If one party fails to adhere to the provisions of the agreement, business litigation may be filed, requesting monetary and/or non-monetary damages.
For example, IMAX Corp. agreed to lease certain equipment to a science and arts center in another state. The movie projection company claims in a federal lawsuit that the lessee defaulted on the lease. IMAX is asking the court for approximately $376,000 in damages. Officials with the science and arts center recently filed a counterclaim, seeking $75,000 based upon an allegation that IMAX breached the contract first.
Pennsylvania's Whitaker Center for Science and the Arts (Whitaker) claims that when the lease was renewed back in 2004, IMAX knew it was leasing equipment to Whitaker that would not be capable of showing Hollywood feature films, something which would have provided Whitaker with the ability to increase the number of people coming to the center. Further, the center insists that its financial obligations to IMAX were current when the movie projection system was removed in Sept. 2014. Whitaker contends that since it is not in possession of the equipment, it should not be obligated to make any further payments.
The issue of which party breached a contract first is important because the initial breach could release the other party from any further obligation under the contract. This is why it is often necessary for courts in California business litigation regarding contracts to make a determination as to which party initially failed to meet its obligations under an agreement before the matter can proceed further. Clearly, it is essential that a business involved in such a dispute seeks the advice and assistance of someone familiar with contract law at both the state and federal levels.
Source: pennlive.com, "Whitaker Center fires back against $376K IMAX breach of contract suit", Matt Miller, April 27, 2015