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Coastal Field Services defends breach of contract claim

The Pipeline construction company, Coastal Field Services recently obtained a favorable defense ruling for a charge leveled against them by a former employee. The company had allegedly offered the employee a 2% ownership stake in exchange for staying with the company. The employee claimed that the company never provided the ownership stake and subsequently terminated them two months later.

The court found that Coastal never agreed to grant the former employee the 2% ownership interest in exchange for his continued employment and absolved the company of any damages.

An example of the importance of documentation

Business owners can look to this case as an example of the importance of obtaining legally sound, formalized agreements and maintaining documentation. Though the plaintiff claimed that he was offered the ownership stake and that the company stalled with providing him documentation, jurors of the court decided that the employee did not provide enough evidence to support his claim.

In disputes involving a breach of contract, it is imperative that you can provide a binding contract which demonstrates the provisions that the accused party violated. In this case, it is unclear whether the company ever guaranteed the ownership stake.

Iron out the details

One of the most important skills of running a business involves managing the intricacies of a contract. This skill becomes even more important with contracts that may be a lot more complicated than the one of this case. Making sure that you work through every detail of a contract during a negotiation, and putting processes in place to measure those deliverables is a big step in avoiding future contract disputes.

Whether it is a contract you have in place with an employee, a client, or another company, efforts made to increase clarity and accountability can possibly prevent future litigation.

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