Litigation Law – What Makes a Contract Legally Enforceable?
Amazon sellers often ask me, “When do we have an enforceable contract?”
That’s what I’m going to be talking about today on behalf of our litigation department.
Okay, Amazon sellers, so you’ve been buying products from a particular brand and then you’re selling them online. You have a contract with that brand, and that is a signed, sealed deal. Whatever’s in that contract governs your relationship.
What we’re often seeing is that you’ll have contracts that expired. You signed a contract with a brand that you can buy goods from them, sell it wherever you want, no limitation. There is nothing that says you can’t sell it on Amazon. But that contract expired years ago and you kept working under the same deal, and then you get a notice from the brand saying, “Hey, you cannot sell on Amazon anymore. That’s outside our agreement.” You’re like, “What are you talking about? Here’s my contract from 2015 that says you’re well aware we’re selling this stuff online.” They write back, “Well, we are terminating that agreement. It expired one year later, we never renewed, so if you want to keep doing business with us, you got to stop selling on Amazon.”
What are your rights?
Well, number one, you have every right to buy and sell anything you want as long as your sales are protected by the first sale doctrine. Number two, that contract that terminated within the language of the contract, that thing is over. If the contract said this is from January 1st, 2017, and it ends on December 31st, 2017, you no longer have a contract. You’ve just been working transaction by transaction, but you don’t really have a whole lot to argue.
What most brands will do is they’ll send you a notice terminating that contract and letting you know that, going forward, you can’t sell on Amazon. Those arguments have a lot of weight.
If this is the scenario you find yourself in and you have questions, contact me, let’s review the terms, look at the termination, and see what your rights are. In every situation, the rights may be different. You may be able to keep selling online, you may not be able to sell online, or it might be time to negotiate a new agreement with that brand where you are both making a lot of money.