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Breach of Contract Lawsuits Between a Nonprofit Organization and a Corporation


The beauty of operating a nonprofit organization is that it serves some purpose other than making its owners wealthy. In order to accomplish their goals, nonprofits often make agreements with for-profit businesses, and it is wise to formalize these agreements with legally enforceable contracts.  Whether you agree to pick up the leftovers from a restaurant at the end of each day to use them for your hunger relief organization or rent vans and bikes with which to deliver meals, you are on firmer footing in the event of a dispute if you have a written contract.  And then there are the contracts that are about the same for nonprofits as for corporations, such as a lease agreement with a landlord.  If your nonprofit organization is involved in a dispute over a contract with a business, contact a Los Angeles business litigation lawyer.

Historic Hotel Attempts to Evict Museum That Operates on Its Premises

In the early 1990s, a historic hotel, which operates as a for-profit business, signed a contract with the Redevelopment Agency of the city where the hotel is located.  The contract required the hotel to lease space within its premises to a museum foundation and to let the foundation offer docent-guided tours to the public in certain areas of the hotel.  Meanwhile, the state of California has since dissolved all of its cities’ redevelopment agencies.

The hotel’s contract with the redevelopment agency gives the parties the right to renew the lease of space in the hotel when the contract period expires.  Now that the contract period is coming to an end, the museum foundation wants to renew the lease, but the hotel is trying to evict it.  While the eviction case is going through the court, the foundation has sued the hotel for breach of contract.  The hotel argues that the other party to the contract it signed was the redevelopment agency, not the foundation; therefore, it reasons, the foundation has no basis to sue it for breaching a contract to which it is not a party.

Members of the foundation fear that, if the foundation cannot operate out of the hotel whose history is the basis of its existence, it will not be able to continue to operate at all.  In the breach of contract lawsuit, the museum foundation is asking the hotel to offer it the opportunity to renew the lease or, if it is not willing to do that, to pay monetary damages to the foundation.  The Press-Enterprise website did not indicate the amount in damages that the foundation is seeking, but it is at least $25,000.

Speak With a Los Angeles Business Dispute Lawyer

A Los Angeles business dispute lawyer can help you if a business has breached its contract with your nonprofit organization.  Contact Litigation, P.C. in Los Angeles, California to discuss your situation or call (424)284-2401.


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