Question
Starbucks, the caf chain, found itself in an agreement it could not live with. After a strong start selling coffee products with Kraft in 1998,
Starbucks, the caf chain, found itself in an agreement it could not live with. After a strong start selling coffee products with Kraft in 1998, the environment changed. But there was no date for ending or reviewing the agreement. Starbucks felt in 2010 it was necessary bring the agreement to an end and offered Kraft cash to end the agreement. Kraft, however, refused. Thereafter Starbucks simply broke the agreement. Kraft insisted on arbitration which it won in 2013. As noted in the Harvard Law School article at bit.ly/1tyCV56, the companies could have and should have agreed to a time or set of conditions for renegotiation. Writing these issues out would have provided an easy, and cheap, process for continuing, changing, or terminating the agreement. In the end, both parties wasted money and decision-making time. Starbucks additionally had to pay all the profits it made on similar coffee products after breaking the agreement, over $1 billion, to the Kraft spin-off company, Mondelez.
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