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Contract dispute between Ontario and Los Angeles over airport

One of the most important benefits of developing a contract is the clarity it provides when determining a variety of business issues. Even an agreement from 1967 obligates the parties involved to uphold their commitment diligently.

Therefore, when the city of Ontario recently went to court to dissolve the long-held agreement with Los Angeles to operate the former city's airport, it cited breach of contract due to neglect and mismanagement.

The basis of the complaint is that Los Angeles faces a conflict of interest in the operation of LA/Ontario International Airport, and that Los Angeles failed to diligently attract and retain service at the airport. Additionally, Los Angeles never formed an airport advisory board to supervise Ontario's operations.

The lawsuit holds Los Angeles World Airports accountable for declining passenger traffic in Ontario. Specifically, Ontario cites that as costs have continued to climb, passenger traffic has nearly been halved in the past several years, dropping from 7.2 million passengers in 2007 to an estimate of fewer than 4 million passengers this year.

Though the two parties attempted to negotiate a settlement deal, they appeared to be unable to agree on a value for the Ontario airport. Ultimately, Los Angeles walked away from the negotiations, so Ontario filed suit in Riverside County, outside both of their jurisdictions.

Contracts serve a very real purpose by helping to eliminate confusion later on. When it comes to negotiating a contract, having the right legal assistance to ensure all parties concerned agree on the terms can make future enforcement easier to handle and help to avoid difficult contract disputes.

Source: Los Angeles Daily News, "Ontario files lawsuit against L.A. seeking control of ONT," Liset Marquez, June 3, 2013

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