Some Kansas gamers may appreciate the convenience of being able to pick up their favorite titles at a local pharmacy, but a deal between Walgreens and AtGames has led to a breach of contract lawsuit. The pharmacy chain sued the plug-and-play game developer, saying that the company refused to honor an agreement about unsold units. According to Walgreens, AtGames provided products to the pharmacy company with a “guaranteed sale” clause. This means that the game company had to accept back unsold units and refund Walgreens what it paid for them. However, Walgreens says that AtGames has refused to pay for unsold games that it returned.
The pharmacy chain says that AtGames breached their contract. It returned over 66,500 unsold games, each worth between $15 and $38. After the return, AtGames refused to refund Walgreens, and the pharmacy chain says it is owed almost $1.62 million as a result. Walgreens offered plug-in and portable microconsoles produced by AtGames featuring classic systems like the Atari 2600 and the Sega Genesis. It also had multi-game titles with plug-and-play controllers offering arcade favorites like Pac-Man, Space Invaders and Centipede. The game company has not yet responded to Walgreens’ claims, and it has until Oct. 10 to file a reply.
Contract issues can doom relationships between many companies. With guaranteed sale clauses, some companies may run into trouble because they do not have the ready cash to refund a large sale, having invested the proceeds into new products or paid out the money received to other vendors. This is especially true when sales of a product fail to live up to expectations.
Business relationships rely on contracts to function effectively. When an agreement is breached, the resulting contract dispute can be costly. A business law attorney can help clients negotiate contracts effectively and take action in case of a breach.