The Law Office of Lynnette Ariathurai A Professional Corporation

Business contract dispute erupts over oil and petroleum

Business is based upon agreements and legal contracts. The businesses that are parties to these contracts usually act with the assumption that parties will adhere to the terms specified in the contracts in California or in any other state. However, there are times when a party to a legal contract does not follow through on its end of the bargain. Many times the business contract dispute results in a lawsuit being filed.

This may have been what happened in a recent dispute between a company and a refinery plant. Crest Energy Partners LP initiated a lawsuit against Motiva Enterprises LLC in a complaint filed in early October. The complaint cites breach of contract, negligent misrepresentation, promissory estoppel and quantum meruit in its list of allegations against the defendant. The lawsuit claims that Motiva failed to follow through on its end in a contract to hire Crest to provide personnel and equipment to remove and clean petroleum products being stored at the defendant's refinery location.

Crest claims that one tank of petroleum contained two times as much product as Motiva had described which resulted in significant additional costs for the plaintiff company due to additional need for labor and equipment. Also, part of the contract was Motiva's promise to provide the plaintiff with 20,000 barrels of light cycle oil, however, Crest claims that Motiva refused to provide Crest with the oil. The plaintiff company is now asking the court to grant a total of $10 million plus legal costs.

When a business contract dispute results in a lawsuit, a company that is a party to the lawsuit may have to present a legal argument in a court. Both sides of the legal dispute will have a chance to have its version of the situation heard. However, the party which presents the strongest legal argument based upon the facts of the case will have the best chance of prevailing in California.

Source: Southeast Texas Record, Motiva Enterprises named in breach of contract suit, Joel Brakken, Oct. 28, 2013

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