Business face a number of potential legal issues that affect the way they operate. Businesses potential legal issues include intellectual property, privacy, ethics, and security. Legal disputes always cost money to resolve. The money needed to resolve a legal dispute puts strain on businesses. Some legal disputes can drag on for years, for example in the case of Kraft vs. Starbucks a case that began in November 2010 and was finally resolved in November 2013.
In 1998 Kraft and Starbucks made a deal. Kraft gained the sole rights to sell Starbucks bagged coffee in retail outlets. “Kraft first began marketing Starbucks roast and ground coffee in 1998 and succeeded in building a highly profitable CPG business, from a base of approximately $50 million to approximately $500 million in 2010” (PR Newswire, 2013, P. 1). In November 2010 Starbucks informed Kraft they intended to break their contract. Starbucks would no longer allow Kraft exclusively to market and produce Starbucks coffee. Kraft initially tried to place on injunction on Starbucks to prevent the breach of contract but the court ruled in favor of Starbucks. In November 2013 in binding arbitration Mondelez International, which spun off from Kraft in 2012, was awarded 2.7 million in damages.
The conflict between Kraft and Starbucks is a legal issue. Starbucks and Kraft entered into a legal and valid contract. Kraft made an offer to Starbucks to be exclusively market, produce, and sell bagged Starbucks coffee, and Starbucks accepted the agreement. Starbucks exhibited nonperformance to the agreement by not following the terms of the agreement. Originally Kraft wanted to place an injunction to stop Starbucks from the breach of contract until a decision could be reached in arbitration. The court stated, “We conclude that Kraft has failed to show that it faces an actual and imminent risk of injury that cannot be compensated by money damages” (The New York Times, 2011). The ruling forced Kraft to wait on any decision made in arbitration. Kraft demonstrated in arbitration the financial hardship the breach of contract caused them and was awarded 2.7 million dollars.
In the case of Starbucks vs. Kraft the legal dispute affected Kraft’s revenue from the sale of Starbucks bagged coffee. Legal issues are expensive and in some cases drive companies to complete destruction. There are several other types of legal issues that affect businesses besides the issues seen in the case of Kraft vs. Starbucks. There are five legal issues commonly seen by businesses disgruntled employees, discrimination or harassment, immigration audits, copyright and patent issues, and dissatisfied customer (Leo, 2013). Legal issues can affect a business’s ability to hire employees, sell their products, and meet financial obligations.
Every business has some kind of intellectual property. Trade secrets are a form of intellectual property that...