Legal Question in Business Law in California
Company A asked Company B to manufacture a product( tablets for oral intake) .
A provides ingredients and formula and paid half of the manufacture fee.
B is licensed and FDA approved and insured facility, and is responsible to make the product and do all the tests before and after the tablets making. In the middle of the process. B was shut down by a federal enforcement agent
Consequence: A losses the ingredients and the fee
Question: 1. Does A have a legal right to claim to B for a compensation for all the losses ?
2 . what is the procedure?
3 Answers from Attorneys
That sounds like a pretty straight-up breach of contract case. A is obligated to try to have the tablets manufactured elsewhere if doing so will mitigate their damages, and A is entitle to sue B for all the losses incurred. The written agreement between A and B might alter that in some way.
I agree. This sounds like a pretty straight forward breach of contract scenario. I suggest that you consult with counsel in private to discuss your options moving forward.
Kind regards,
Frank
www.LanternLegal.com
866-871-8655
DISCLAIMER: this is not intended to be specific legal advice and should not be relied upon as such. No attorney-client relationship is formed on the basis of this posting.
A review of the contract is necessary to fully understand A's rights and options. It definitely sounds like A would have a case, though the contract may shape the contours of what can be recovered, and how. For instance, the contract may contain things like limitations on damages, an arbitration clause, a choice-of-forum clause saying where suit can be brought, an attorney's fees provision.
The possibility of claims in addition to breach of contract also cannot be ruled out, without more knowledge of the facts.
Without looking at the contract and knowing more about the situation, it is not possible to say how to proceed. A needs to consult with an attorney for advice.
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