Louisiana company drops contract bid over litigation

Corporate contracts are often very complex. Sometimes general disputes over agreements can lead to litigation. The situation may get especially tricky for the parties when one of the corporations involved is facing a lawsuit over a contract dispute.

Client Service's Network Inc. has a contract with the Maryland health department to create an IT system having to do with Medicaid. The problem is that CNSI is being investigated by the Federal government over their contract bidding methods. The State of Louisiana dropped an over 200 million dollar contract with CNSI recently because of the Federal investigation into their contract bidding methods. A CNSI executive even resigned over the investigation. CNSI is also looking to file a claim against Louisiana for contract breach in bad faith.

A breach of a contract is when one of the parties fails to meet its obligations. Bad faith is when one of the parties did not intend to mean what they said. A breach of contract in bad faith is when that breach has to do with some type of betrayal of trust. When there is a contract dispute there are generally three possible ways to recover. The recovery types include having the contract performed or completed as it originally was written, receiving money damages for the breach or termination of the contract and compensation for the breach.

Business is complex with many different parties often involved. Contracts and the bidding process are just one step in having a project or task completed. Often millions of dollars are at stake and it is important to have expert advice when dealing with such complex business dealings.

Source: Baltimore Business Journal, "CNSI's Louisiana woes not expected to hurt Maryland work," Sarah Gantz, May 7, 2013

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