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Ford's court victory reverses $2 billion lower court ruling

Some members of the Virginia business community are taking note of a recent decision in favor of Ford Motor Company that was handed down by an Ohio appellate court. The appeals case resulted from lawsuits filed by several Ford dealerships charging the automaker with breach of contract for engaging in discount practices that they claim violated their dealer agreement.

The controversy centers around Ford's competitive price assistance program, or CPA, which allows dealers to request discounts directly from the automotive manufacturer on specific sales transactions. Some Ford dealerships feel that this practice puts them at a competitive disadvantage and violates their dealership agreement with Ford which states that all pricing discounts will be published publicly.

In the first case to come to trial, a lower court initially ruled against Ford in the case and awarded the plaintiff dealership $4.5 million. A few months later, the judge presiding over the case granted a request to convert the case to a class-action lawsuit and added about $1.2 billion in interest to the award to a class of about 3,000 dealers, making the final cost to Ford $2 billion. Ford appealed the lower court ruling, and the verdict was struck down by the appeals court which felt the dealership contract was too ambiguous to preclude the CPA program. The lawyer representing the dealerships indicated they may appeal the ruling to a higher court.

Businesses that are involved in commercial disputes may need legal assistance to present their case in court. Attorneys working in the area of business and commercial law may be able to assist business clients trying to protect their contractual interests.

Source: Bloomberg, "Ford Didn’t Breach Truck Dealer Contracts, Ohio Jury Says", Margaret Cronin Fisk & Harlan Spector, September 11, 2013

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