I am under contract as a licensed provider for a certain line of health and beauty products. This contract states that I am not to use/sell any other products (by another manufacturer). I have learned that the products distributed by this company have repeatedly failed FDA inspections (6 years in a row) and have been found to contain harmful levels of bacteria, yeast and mold. The company simply uses legal stall tactics to avoid making the necessary changes to comply with FDA Safe Manufacturing Guidelines. When they are cornered, they simply move their productions to a new lab.

The company has failed to respond to numerous phone calls, emails and certified letters to answer my questions and concerns about their products. I finally concluded that the products are indeed unsafe and stopped purchasing from them. In order to stay in business, I have begun buying products from another company.

Now, the company is threatening to sue me for $1,000,000. for breach of contract because I refuse to buy their products.

Can they in fact sue me for refusing to expose my customers to contaminated products? Am I in breach of contract....or are they in breach of contract?

donf

Sever your association with that company. Resign your position with the original company. Or get them to modify your contract to purchase and sell other similar products.

As long as you are bound by the original contract, not to purchase and sell similar products, you can be held accountable if you do so.

Check with a lawyer first, please, since I am in no way a member of any bar community.

Abbygail

I have tried to sever my relationship with this company. I sent a certified letter to them in December 2007 stating that I would no longer purchase or use their products until they provided verification from the FDA that the products were safe. That I was not going to take legal responsibility for potentially harming my customers by knowingly using products that may be contaminated. I also stated that I considered my contract with them to be null and void until such time that I had proof that the products were safe. The owner of the company sent me an email telling me to keep my mouth shut and keep using the products!

Now, 5 months later, they sent me a letter saying that they are going to sue me if I don't start buying their products again.

My thought is: What judge in his/her right mind would find me at fault for refusing to knowingly expose the public to contaminated products?

donf

Abby,

You really need to have a local attorney to study the original contract you made with this corporation.

In particular, look for any "Quality of Product" statements made by the corporation.

Next step I would take would be to send a certified letter to the corporation stating that you are no longer able to continue to act as a sales agent for them. Do not bring any other information to their attention. Simply resign!

In any case, please have an attorney review your situation!

froggy7

You might also consider contacting the FDA District Office. As you are finding out, court cases take a long time, but they may be able to use your correspondence with the company in their case. (As they freely admit, they love disgruntled former employees and ex's!) And they may be able to bring some pressure to bear on your behalf. If the products violate the GMPs, they cannot legally be sold, so the company can't force you to sell them. Now, I don't know if they can keep you from using someone else's product.

And yes, get an attorney to look at the contract. You may just need to breach it and have the company sue you. In which case, you want to have some firm legal grounds to stand on.

donf

I disagree with the last poster wrt how you position yourself with the corporation.

Currently, you are under contract as a sole sales agent for that corporation. There is probably nothing in that contract that gives you authority over product content.

Any issues you have with content or quality of their products you should be raising as a "concerned user" of this products. Toward that end, you, abbygail, can rail and complain as you wish.

Your contract appearantly locks you to who you can order from and what products you can sell.

In no way can that corporation limit your use of products to theirs alone. That's not the agreement you entered into.

Personally, I would send a letter telling the corporation that as a user of their products you can no longer in good conscience recomend purchase of the products because of reasons you have previously communicated to them.

Therefore, in good conscience you can no longer function as a sales agent for them advocating products that you yourself cannot honestly recomended. Therefore, you are immediately resigning as a employee of their corporation and no longer wish to be associated with either their products or their corporation.

Honestly, I do not see how they can force you to be forever bound to them by whatever contract you signed. BUT I AM NOT A LAWYER!

Abbygail

Don and Froggy,

Thank you both for your input. I have sought legal advice on this matter and was told to:

1: Continue using the products and hope no one gets sick and sues me.
2: Buy their products....and throw them away (great financial loss)....and secretly buy and use other products.
3: Close my business and do something else. (not an option financially)
4: Let the company sue me and HOPE I win in court! Please note that other licensees with this company have tried that option and are now out of business and bankrupt.
5: Get a group of the licensees to file a class action suit against the company. Been there, did that. After weeks of submitting info to the lawyers, they all back out.

I even went to a local television station with the story. They assigned a reporter to investigate.......weeks went by where the reporter was VERY excited about the story.....and then he stopped returning my calls and will not respond to emails. I'm wondering what kind of threats the company made to achieve this.

So, you see, I and many other licensees are in a huge mess and it seems we have no way out. I just thought someone here might be able to offer some suggestions that we haven't already thought of.

Abbygail

donf

Dear Abby,

This is black letter contract law.

1) You are contracted to sell the product, not use it. The corporation is
libale for product quality. If you in good conscience cannot offer the
product for sale, resign your position with the company.

I cannot understand, how a contract can sustain across your entire lifetime.
If your state is "an at Will" state, then the company has the right to sever your association with them at any time. You also have a similar right.

Check with you Employment Commission.

froggy7

It probably wouldn't last forever. But many contracts have non-compete clauses in them, restricting you from working in the field or for certain companies for a certain length of time. The problems I can see the OP having is that she can refuse to sell the product, and there is nothing the company could do. It's going to work for someone else that is the problem. And if you need to be in that field to make money, that does paint you into a corner. And, of course, the other problem is that if a client of hers is injured by the product, she is going to be sued. Especially if the company is foreign.

Do you have any proof that the company's product doesn't meet the FDA guidelines? Or is it all hearsay? There are some things you might try if you have irrefutable proof.