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California digital music company brings suit against HSN

When a business enters into a contract, it seeks to receive a benefit of some form from the other contracting party. However, sometimes contracts do not work as planned and the parties may have to pursue other options to achieve a desired outcome.

A digital music company based in California recently brought a suit against HSN, the Home Shopping Network, alleging that HSN improperly used its system for selling digital media. The music company, Digital Trellis, claims that they entered into a contract with HSN to make a store for digital media but HSN breached the contract and used their technology to create the store with another company. Digital Trellis claims that it proposed the idea to HSN to sell digital media and later signed a letter of intent to do so with a planned launch date. After HSN felt that Digital Trellis failed to respond quickly enough to a request, HSN decided to stop doing business with Digital Trellis and began working with another company. Digital Trellis feels the digital store that HSN eventually ended up using was similar to the one they had created and that they were fully capable of providing the same services. Digital Trellis is seeking $15,000 in damages and an injunction against HSN to prevent them from using its trade secrets.

When two businesses enter into a contract with each other, they are both bound by the obligations detailed within. A breach of contract is defined as a failure to fulfill any of these obligations. A breach can be found by a failure to perform in an adequate amount of time, a failure to perform according to the specifics of the contract or a failure to perform at all. If a breach occurs, one of the parties may seek to require the other party to perform the contract, they may request financial compensation for any damages they incurred as a result or they may have the contract canceled and ask for an award equal to the benefit that they provided the breaching party.

If one of the parties to a contract fails to meet the outlined obligations or violates the terms of the contract in some way, the injured party may take legal action to receive compensation. A commercial law attorney can assist a business with such an action.

Source: Tampa Bay Times, "Company says HSN stole its system for selling digital media," Susan Thurston, Mar. 7, 2014

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