Macy's and Martha Stewart settle dispute over contracts

Illinois Macy's shoppers have been able to purchase products from the Martha Stewart Living collection since 2006. In 2011, Martha Stewart Living began selling home decor products at J.C. Penney (JCP) stores as well. Soon thereafter, Macy's filed suit against JCP and Martha Stewart Living Omnimedia, claiming that Martha Stewart Living's deal with JCP violated its existing contract with Macy's. These types of disputes about business contracts impact both large and small companies that seek to compete in the consumer marketplace.

Recently, Martha Stewart Living Omnimedia settled with Macy's. The terms of the settlement were not disclosed, though Macy's claims against JCP remains unresolved. Originally, both JCP and Martha Stewart Living defended the lawsuit by claiming that their arrangement fell under an exception to the prior contract with Macy's. However, with this recent settlement, Martha Stewart Living has pulled several products from JCP stores, except for items such as window treatments and rugs.

Macy's has not dismissed its separate claims against JCP. One of the remedies Macy's was seeking in its suit against JCP was compensation for profit losses in connection with the sale of Martha Stewart Living products at JCP stores. In light of the current settlement, it remains to be seen how the court will treat the issues remaining between the two retailers.

Nearly every Illinois business enters into contracts with other parties. Some parties breach the agreements in the contract outright, but often a breach of contract claim could come down to a matter of interpretation. At this point, each company will likely try to convince the court that its interpretation is the correct one. Once all of the evidence is presented, the court may issue a ruling as to which party interpreted the contract correctly and damages may be awarded accordingly.

Source: The New York Times, Martha Stewart Living and Macy's Settle Dispute and Keep Partnership, Elizabeth A. Harris, Jan. 2, 2014

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