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Pandora radio caught up in breach of contract lawsuit

Many people in California enjoy listening to the broadcast of the online radio company, Pandora. However, they may be concerned to learn that Pandora is currently engaged in a lawsuit that the company says is "baseless."

TuneIn, a music streaming service, has filed a lawsuit against Pandora, alleging breach of contract, along with negligent misrepresentation, breach of implied covenant of good faith and fair dealing, and anticipatory breach.

The issue began in 2016 when the two businesses entered into a contract in which Pandora agreed to sell only TuneIn's ads for the following year. Per the terms of the contract, Pandora agreed that it would pay TuneIn a certain amount of revenue each quarter, and TuneIn agreed to supply Pandora with a certain amount of audio impressions monthly. The contract also resulted in Pandora's creation of Harmonic Audio Network, which would be a "game-changing" advertising platform.

However, TuneIn claims that Pandora did not shunt enough in the way of resources and effort needed to ensure the new advertising platform would be successful. Sales of TuneIn's impressions were low, at only 13.9 percent of the company's estimated 881,000,000 impressions.

Pandora, however, states that TuneIn did not give the company its estimated sales of inventory in a way that was "reasonably acceptable." In March of this year, Pandora notified TuneIn that it was terminating the agreement because it claimed TuneIn had breached it. Following that, Pandora did not pay TuneIn what TuneIn was reportedly owed under the contract.

In TuneIn's lawsuit, however, it claims that Pandora is trying to avoid meeting its financial obligations per the terms of the contract because, in the end, the low number of sales meant the contract was a "bad deal" for the company.

It remains to be seen how this lawsuit will play out, but it exemplifies how complex business contracts can be and how complicated things become legally if one party claims the contract was breached. Therefore, whether a business is executing a contract or is claiming the terms of the contract were violated, it is important to seek the help of a contract law attorney.

Source: Billboard, "TuneIn Sues Pandora for Breach of Contract Over Failed Ad Sales Goals, Guaranteed Payments," Colin Stutz, June 20, 2017

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