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Breach of Contract Case Against Uber

by Michael Fleming on Nov. 08, 2017

 General Practice 

Summary: Contracts between individuals and companies can get complicated. It is critical that they are initially crafted with care so as to avoid litigation later on.

Contracts between individuals and companies can get complicated. It is critical that they are initially crafted with care so as to avoid litigation later on.

Take, for example, the lawsuit that business travel management company TSI USA LLC filed against Uber Technologies, alleging breach of contract, unjust enrichment, fraud, tortious interference with contracts, and defamation on the part of Uber and its executives, and arguing that TSI is entitled to around $2 million in damages after Uber cancelled its agreement to implement a system to have its travel services managed by TSI. Below, we discuss these claims in more depth as they relate to this specific case.

Breach of Contract

Breach of contract is a legal claim made by a plaintiff who argues that a binding agreement or exchange has not been honored by the other party either because that other party failed to perform (i.e. cancelled the contract) or there was somehow interference with the party performing.

In this case, TSI claims that it and Uber entered into a valid, legally-binding, and enforceable contract (i.e. a Services Agreement and Statement of Work), and Uber breached that contract by terminating the Agreement prematurely, without cause, prior to the contracted-for two-year term. In doing so, it failed to remit to TSI the costs the company already incurred, and to compensate TSI for products and services it delivered both within and outside of the scope of the Agreement, pursuant to requests that Uber made.

Because TSI is alleging that it fully performed and satisfied its part of the Agreement, while Uber knowingly, intentionally, and willfully breached, it is claiming monetary compensation to cover implementation costs, the cost of providing travel service to Uber, the cost of airline travel advanced, out-of-pocket travel costs advanced, attorneys’ fees to bring the lawsuit, and any additional exemplary damages permitted under the law.

Tortious Interference

Tortious interference is a civil tort claim alleging that a defendant wrongfully interfered with another party’s contract, either by preventing that party from performing its obligations under the contract or harming an existing business relationship by spreading harmful information about a company.

In the TSI case, the company is alleging that, in spite of the fact that a former TSI employee was prohibited from performing travel-related services for Uber for a period of 24 months following termination of her employment by TSI, Uber arranged, encouraged, and otherwise induced this former TSI employee to breach her contract and accept employment with Uber’s new travel provider. Because this former employee went ahead and breached the contract—allegedly because of Uber’s conduct—TSI claims that it suffered damages, and is seeking compensation for its losses resulting from interference with the contract, including attorneys’ fees in pursuing the lawsuit, and any additional exemplary damages permitted under the law.

Defamation

Defamation is a claim related to the act of damaging or slandering the good reputation of someone. For example, in the TSI v. Uber case, TSI is claiming that Uber verbally disseminated false and disparaging information about TSI to third parties with malicious intent for the purpose of intimidating and retaliating against TSI, with knowledge of the statements’ falsity and/or reckless disregard for the truth. TSI is seeking compensation for its losses resulting from the statements, including attorneys’ fees in pursuing the lawsuit, and any additional exemplary damages permitted under the law.

Houston Civil Litigation Attorneys

If your company has been the victim of breach of contract, tortious interference, and/or defamation, we can effectively represent your business. Conversely, if you have been served with a similar lawsuit, do not hesitate to reach out to us for assistance in filing an answer. Contact us today to find out how we can help you and your business.

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