Chrysler Sues Former Partner Daimler in Breach of Contract August 27, 2009

Yesterday, news outlets worldwide were reporting about the lawsuit that Chrysler filed last week seeking to compel Daimler to continue supplying them with components that are critical to completing the manufacture of the Jeep Grand Cherokee and Chrysler 300 models. At the same time, the news reports indicated that shipments had not stopped as yet. The natural question is this: if Daimler hasn’t stopped supplying the parts, how can Chrysler claim that Daimler should be held liable in breach of contract?

If you read between the lines, the answer is relatively straightforward: based upon Daimler’s actions, Chrysler believes that Daimler will halt distribution. Therefore, rather than wait until a full-blown crisis erupts, they have wisely taken pre-emptive action, and sued Daimler for their anticipatory breach of contract. (It is a common misconception that you have to wait until someone has actually broken your agreement before you can sue.)

Jonathan Cooper is a New York Business Litigation and New York Commercial Litigation Lawyer with a focus on New York breach of contract and New York business fraud claims before the Nassau, Queens, Brooklyn, Bronx, Westchester and Suffolk County courts of New York State. For more information, feel free to contact his Long Island office at 516-791-5700.

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