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Business litigation between Arizona mall and tenant heats up

Every business venture comes with an element of risk. In many cases, Arizona small businesses have to rely on the information available at the time when entering into contracts with other companies. If one party believes that the other has breached the contract, business litigation could be filed to seek restitution for any economic and/or non-economic losses.

An Arizona man who ran a successful food truck decided it was time to branch out and secure a fixed location. He decided to rent space in a mall's food court. During negotiations with the mall, he asked whether management anticipated any store closures due to the anticipated opening of a new outlet mall in the area. He claims the mall assured him that it would not interfere with the mall's business. However, several large stores such as Old Navy, Carter's and Saks Off Fifth are all discussing leaving the mall.

He claims that he entered into a lease based -- at least in part -- on management's assurances. Within approximately six months, business fell to a point where he was forced to abandon the location. Since then, the Foothills Mall, which is located in Tucson, has filed a breach of contract suit against the owner of Cheesy Rider for non-payment. The owner then filed a countersuit, alleging that the mall acted in bad faith during lease negotiations.

In this business litigation, an Arizona court will ultimately determine whether the contract was breached and by which party. Ordinarily, the courts must make rulings based on what is in the written contract only. Verbal agreements are typically not part of that review. However, if it can be shown that one of the parties negotiated in bad faith -- essentially inducing the other party to enter into a contract through fraud or misrepresentation -- the court rule that the contract is null and void.

Source: tucsonnewsnow.com, "Foothills Mall sues tenant for breach of contract", Sonu Wasu, Aug. 12, 2015

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