The Andres Lopez Law Firm

Farmer wins major lawsuit involving contract dispute

According to recent reports, a farmer in another state is celebrating after a jury awarded his family business $23.3 million in a breach of contract lawsuit. At one point, the farmer had been the exclusive supplier of certain chili peppers for Huy Fong Foods, Inc., the business which manufacturers several hot sauces, including a popular Sriracha sauce.

The jury found that Huy Fong not only had breached its supplier agreement with the farmer's business but also had engaged in fraud. The jury specifically found that Huy Fong on certain key points of the business relationship had either given misleading statements or had hidden information that it had a duty to disclose.

The result of the litigation came as a welcome relief to the farmer, whose family had been raising crops in the area for over a hundred years. Through its relationship with Huy Fong, the operation was able to expand from 400 acres in 1968 to over 4,000 acres in 2014.

However, in 2016, the relationship between the two businesses went south when Huy Fong insisted that the farmer return $1 million, which Huy Fong claimed was an overpayment to the farmer for the cost of growing the peppers. Eventually, after the two businesses parted ways, Huy Fong resorted to the courts in order to collect the overpayment.

This turned out to be a bad bet for Huy Fong, as the farmer used the contract dispute as an opportunity to counterclaim for the loss of millions of dollars in revenue due to Huy Fong's alleged breach of the agreement. The jury sided with the farmer's version of events and tacked on punitive damages, although Huy Fong plans an appeal.

Exclusive supplier agreements are important across the business world, including in Florida's agricultural industry. Those who are having disputes or difficulties over these sorts of agreements can consider getting legal advice and assistance from an experienced South Florida business attorney.

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