One of the main purposes of signing a contract is to create a requirement for the other party to follow through on a promise. Contracts help ensure that businesses will receive the services, utilities and materials necessary for them to operate.
When one company fails to follow through on its obligation to another, the business that does not receive the necessary goods or services might suffer significant hardship. In a material breach of contract, either party may fail to uphold their obligations to the other, causing financial losses for the aggrieved party.
A recent lawsuit filed by a new social media platform against one of the biggest companies on the internet involves claims from each side that the other breached their contract.
Social media platform Parler sues Amazon over alleged contract breaches
Parler started as an alternative to more mainstream social media websites and apps that some users view as too moderate or liberal. Parler offered the fun and connection of social media to those with deeply conservative political views.
They signed a contract for services with Amazon that included hosting the platform. However, Amazon took the site down. Amazon cited a breach of its service contract for its decision to end web hosting for Parler. Specifically, Amazon claims that Parler allowed users to make statements and posts advocating for and encouraging the illegal use of violence.
Parler denies such accusations and in its lawsuit alleges that Amazon is in breach of contract by refusing them the contractual services. Parler has taken things a step further by also claiming defamation in this lawsuit. Although the company has since found new hosting, the issues with hosting could have caused the company significant financial losses.
It will be some time before this case goes before a judge if it does at all. Parler has already dropped another antitrust lawsuit previously filed against Amazon. It is always possible the parties could reach an agreement and settle outside of court.
Breach of contract can do irreparable damage to a business
As the situation with Parler illustrates, not receiving necessary services or materials can damage your company’s bottom line and growth.
Whether you did not receive something you contracted for or have suffered losses because of someone else’s non-performance, you may need to take action yourself over a breach of contract that affects your company’s operations or financial solvency.