Law Office of Henry B. LaTorraca Civil Trial Attorney

Mobile app-based company threatens contract dispute

Contracts are a cornerstone of business operations. Such agreements are made with entities or organizations that a business may have service or product agreements with, such as vendors, commercial leaseholders, insurance companies and employees. When either side to a contract does not uphold its end of the arrangement, a potential breach of contract dispute may arise.

The allegations in a breach of contract lawsuit usually involve some aspect of material nonperformance -- assuming there was a valid contract in the first place. If a violation of one or more material contract terms occurred, the injured party must also prove its losses. Usually the prayer for relief will request monetary damages, although sometimes a party will seek court intervention for specific performance, or requiring the other party to honor its obligations under the contract. 

Although the elements of proof in a contract claim are fairly standard, advances in technology are making for some new and interesting fact patterns. A recent example involves the rideshare and taxi service called Uber. The business platform relies on mobile connectivity: A customer in need of a ride use an app on their mobile phone to get connected with available local drivers.

However, it’s not the only such business model on the market. Lyft is a California-based transportation company also using a mobile phone application. In an aggressive marketing effort, the company is accused of using fake clients to essentially jam Lyft’s platform. However, the terms of the app's service agreement prohibit impersonating real clients or similar such behavior. Lyft is reportedly considering bringing a breach of contract suit against Uber, as well as an unfair competition claim under California state law.

Source: BuzzFeed News, “Lyft’s Case Against Uber,” Johana Bhulyan, Aug. 28, 2014

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