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Los Angeles-based pizza chain engaged in business tort battle

For any restaurateur, deciding to change food or beverage suppliers is never an easy decision. Many factors affecting the business must be considered. There's also a risk that changing suppliers could result in legal action between the restaurant and supplier, often the result of business torts.

When Los Angeles-based pizza chain California Pizza Kitchen recently tried to end a long-standing supplier agreement they have with Pepsi, legal action between the parties ensued.

According to the complaint filed by California Pizza Kitchen, upon learning of the planned supplier agreement termination, Pepsi sent an email to California Pizza Kitchen threatening legal action against the restaurant. California Pizza Kitchen says Pepsi copied Coca-Cola on the email in an attempt to undermine the process.

In the email, Pepsi outlined the terms of the agreement, minimum purchase requirements, and contractual remedies against breach of contract. California Pizza Kitchen asserts this was done by Pepsi to discourage Coca-Cola from entering into a supplier agreement with the restaurant chain.

According to California Pizza Kitchen, the agreement contained a specific non-disclosure agreement that was breached by PepsiCo via the email sent to Coca-Cola. The restaurant chain is seeking damages for breach of contract and tortious interference.

In this case, the tortious interference claim arises out of Pepsi’s attempt to interfere with the restaurant entering into a business relationship with Coke. Intentional interference is one of the elements required to assert this claim.

Often, business torts like this result in counterclaims filed by the other party. When faced with a business situation like the one encountered by California Pizza Kitchen, it is often important to have experienced business law representation on your side.

Source: Courthouse News Service, “Pizza Chain Claims Pepsi Played Dirty,” Jamie Ross, May 24, 2013

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