Red Lobster Files Breach of Contract Suit Due to Lack of Crabmeat

When two companies enter a contract, it is expected that both will abide by their obligations. However unexpected events such as pandemics can occur and throw a wrench into a company’s future plans and growth.

This is what happened to Red Lobster. Last year, the popular seafood restaurant filed a breach of contract lawsuit against Blue Star Foods in Orange County Circuit Court in Orlando. According to the complaint, Blue Star Foods, which is based in Miami, failed to supply contracted crab meat to Red Lobster. This caused the seafood restaurant chain to take certain high-profit items off its menu and lose a substantial amount of revenue. Red Lobster is suing for damages in excess of $500,000.

Blue Star agreed to provide Red Lobster with 67,248 pounds of crab meat between October 2020 and March 2021. Blue Star provided all the crabmeat for that contract. However, there was a subsequent contract spanning from April 2021 through September 2021. It called for Blue Star to provide 114,539 pounds of crab meat to Red Lobster, and that was not fulfilled.

Blue Star’s reasoning was the COVID pandemic. The company claims it could not forecast the worldwide impact that COVID had throughout the world, especially in Vietnam, which is one of the top exporters of crab meat to the United States. In April 2021, Vietnam was ravaged by an outbreak of more than 350,000 COVID cases. Blue Star could not meet its requirements under the contract nor could it find any alternative sources of crab meat.

In August 2021, Blue Star informed Red Lobster in writing of its inability to fulfill the contract. The company claims it is covered by a force majeure clause in the contract stating “neither party shall be held responsible for any delay or failure in performance of any part of this agreement to the extent such delay or failure is caused by fire, flood, civil, governmental or military authority, act of God, or other similar causes beyond its control and without the fault or negligence of the delayed or nonperforming party or its subcontractors.”

Blue Star finds it odd that Red Lobster was unable to find a substitute crab meat supplier, given its extensive resources. Thai Union Group is a leading global seafood supplier and the company made a $575 million investment in Red Lobster in 2016. However, the company did recently sell its stake in Red Lobster.

Blue Star is asking that Red Lobster’s claims be dismissed with prejudice. The company also wants to be awarded attorney’s fees and be reimbursed for the costs of defending itself.

Seek Legal Help

Things do not always go as planned when it comes to business contracts. Promises are not always kept, but there may be valid excuses for this that are covered in the contract.

Fort Lauderdale breach of contract lawyer Edward J. Jennings, P.A. can help you deal with issues that can affect your business and livelihood. We can help you resolve your legal matter. Schedule a consultation with our office today by filling out the online form or calling 954-764-4330.

Source:

seafoodsource.com/news/supply-trade/blue-star-wants-red-lobster-breach-of-contract-case-dismissed