Friday, August 12, 2016

A Contract Is A Contract, No Matter The Circumstances

Violating the terms of any contract can land you in serious legal trouble. Regardless of the circumstances, legally binding contracts are just that: legally binding. This fact lies at the center of one of the most interesting legal battles to make headlines in Little Rock.

The story begins with John Lile, president of Cosmopolitan Life Insurance Co., being accused of charging more than $300,000 in personal expenses to his company credit card. When lawsuits started piling up against Lile and Advanced Insurance Brokerage of America Inc. (AIBA), a company where Lile served as CEO, he was forced to foot the bill for his legal defense.

Lile had insurance from Mutual Marine Office Inc. of New York and Gotham Insurance Co. of Morristown, N.J., which entitled him to legal representation. These companies failed to honor their contract with Lile, leaving him to pay for his own defense. In retaliation, Lile, himself accused of being a crooked insurance executive, is suing two other insurance companies for breach of contract.
While many of us may gain some satisfaction from the irony of an insurer getting cheated by other insurers, the fact of the matter is that Lile has strong legal footing for his claims. He had a binding legal contract with Gotham and Mutual Marine, which they failed to honor. Thus, he is likely to receive compensation from the insurance companies once the case is resolved.

This bizarre and convoluted case illustrates that a contract is a contract, no matter what the circumstances. If you have questions about a contract involving you or your business, meet with a knowledgeable attorney to make sure you’re completely informed of your rights and obligations.

If you have any questions for concerns please do not hesitate to contact us!

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