The And A Small Snack Company

2705 Words11 Pages
Contractual Obligation There is supposed to be trust, honesty, transparency, and a growing relationship between two companies when they mutually agree on a contract that will benefit both parties. However, a unique situation between massive Starbucks and a small snack company that was successful prior to contracting with the economic powerhouse, but was forced to rapidly grow after landing a contract with the coffee giant thereby drastically increasing the company’s output. According to the lawsuit filed by Mellace Family Brands (MFB), Starbucks breached the contract they signed, which set up an agreement for Starbucks to purchase and sell MFB-branded snack products (organic nuts and various candies) at their stores. Starbucks ended the agreement shortly after the first shipment arrived claiming Mellace had "ongoing quality issues." MFB stated that the small company was required to revise its organizational structure when they acquired the Starbucks contract -- improving the business processes, equipment, as well as ordering vast amounts of supplies and deliveries to support the contractual obligations -- that has cost it a minimum of $20 million because of Starbuck’s decision to void the terms of the contract (Kim, 2012). The lawsuit is meant to discern liability regarding the "quality issues" Starbucks referenced. MFB claimed some of their products may have been contaminated by a gas leak at one of Starbucks facilitates, while Starbucks faults MFB for unsatisfactory

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