Lack of contractual enforcement results in lawsuit for Trump


Many New Jersey reality show fans may find it amusing to see Donald Trump grilling contestants on The Apprentice. However, Trump was not laughing when he faced the hot seat in a New York court on April 12. The reason? He is being sued over a licensing deal in which Trump failed to ensure contractual enforcement.

Trump began working with New York firm ALM International nearly a decade ago. The firm was interested in finding clothing licensing deals for Trump and ultimately found a deal with clothing company PVH in 2004. PVH used Trump's name for neckwear and dress shirts.

The deal was that PVH would receive 10 percent of whatever Trump got every time he renewed the PVH contract. However, the deal started to go sour in 2008, when Trump suddenly stopped paying the company. Up to that point, he had paid PVH $300,000.

Trump's lawyer claims that because PVH did not live up to its end of the contract - in which PVH had to be involved in significant negotiations in order to receive payment for a licensing deal - Trump was not in the wrong to stop making payments. In fact, Trump now wants to be paid back a portion of the payments he already made.

In a perfect world, businesses would run smoothly and always operate on schedule and according to the contract. However, sometimes a contract is breached, whether on purpose or unintentionally. In these cases, the parties involved should make an attempt to resolve the matter on their own. But, if they are unable to settle the dispute, the parties can take the matter to court and have a judge and jury decide on the outcome.

Source: USA Today, " Trump grilled in court over contract dispute," Kevin McCoy, April 12, 2013