Legal Question in Business Law in California
unwarranted mandate
a company that provides very senitive data to my company is now requiring me to provide an annual letter of assurance from an independant auditor that my company is in compliance with their principles. this is all at my expense and if i do not comply, all services will be terminated.
1) is this legal?
2) can a vendor mandate a subscriber to pay for something that benefits only the vendor at the subscribers expense?
3 Answers from Attorneys
Re: unwarranted mandate
Yes, they can do that.
Re: unwarranted mandate
Its difficult to give much of a response without
additional facts. From what you've said, the
practice may or may not be inappropriate.
Whether or not the company's demand is
"legal" most likely depends on the subscription
agreement and the nature of the information
being supplied.
I'd want to look at the subscription agreement
as a starting point. There may be language
in there that in fact binds you to provide proof
of compliance as partial consideration for
receipt of the data.
If you'd like, feel free to contact me with additional
information.
The foregoing information is provided as an
accommodation only, and does not constitute legal
advice or a legal opinion based on a comprehensive
review of all relevant facts, nor can provision of
such information be construed as creating an
attorney-client relationship.
Re: unwarranted mandate
The relationship between your company and the vendor is governed by the contract between the two. That contract might be a single document, or it might be several documents, such as a collection of letters and memoranda back and forth, or it might even be no documents at all, and be established by oral agreement and by custom and practice. Whether this new demand by the vendor is a breach of the contract depends on the terms of the contract. Before any attorney can opine on that issue, he or she will have to review all potentially relevant documents and interview you.
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