Chapter 0 Introduction and Case Facts

Summary

MedPro, an American medical products manufacturer, entered an exclusive contract with Mumbai Partners for distributing pulse oximeters in southern India. The contract allowed termination under certain conditions. After initial sales success, MedPro terminated the contract citing Mumbai's lack of market expansion. Mumbai sued, alleging a breach of a non-competition agreement and a scheme to steal their business. Mediation with Dwight Golan and Marjorie Aaron is underway to resolve the dispute.

Takeaways

• 🤝 MedPro, an American medical product manufacturer, entered into an exclusive contract with Mumbai Partners to distribute pulse oximeters in southern India.
• 💰 While each oximeter costs nearly $1,000, the real profit for MedPro lies in selling the replacement probes, which are required for each patient use.
• 📅 The contract allowed either party to terminate the agreement in three ways: for cause, on 90 days' notice without cause, or on the September anniversary date each year.
• 📈 Over the first few years, Mumbai Partners worked to establish the MedPro product in Indian hospitals, with sales growing from $100,000 to $800,000 in four years.
• 📉 MedPro terminated the contract with Mumbai Partners on May 24th of last year, citing Mumbai's lack of progress in expanding the Indian market.
• 🚪 Shortly after the termination notice, Mumbai's chief sales representative resigned and began marketing MedPro oximeters independently, leading to legal action.
• ⚖️ Mumbai sued the former sales rep, claiming a violation of his non-competition agreement and accusing him of conspiring with MedPro to steal their business.
• 🛑 An Indian court enjoined the former sales rep from marketing MedPro oximeters, protecting Mumbai's interests temporarily.
• 🔄 Mumbai continued to sell replacement probes to existing customers but made no new sales of oximeters following the contract termination.
• 🗣️ The ongoing dispute between Mumbai and MedPro led to a mediation process, where mediators suggested private meetings with each client to help resolve the conflict.

Q & A

What was the nature of the exclusive contract between MedPro and Mumbai Partners?

The exclusive contract was for Mumbai Partners to distribute MedPro's pulse oximeters in southern India.

Why is the supply of contacts or probes important for MedPro's profitability?

The real profit for MedPro lies in supplying the contacts or probes, which must be replaced each time the equipment is used, making it a recurring revenue stream.

How could either party terminate the contract according to the written agreement?

The contract could be terminated for cause, on 90 days' notice without cause, or on the September anniversary date each year.

What were the sales figures for MedPro's pulse oximeters through Mumbai Partners over the years?

Mumbai Partners achieved $100,000 in sales four years ago, $500,000 three years ago, and $800,000 two years ago.

What was MedPro's stated reason for terminating the contract with Mumbai Partners?

MedPro cited Mumbai Partners' lack of progress in expanding the Indian market as the reason for terminating the contract.

What action did Mumbai Partners take after the termination letter was sent by MedPro?

Mumbai Partners immediately sued, claiming that the sales representative's resignation and subsequent actions violated his non-competition agreement and that there was a scheme with MedPro's manager to steal their business.

How did the Indian court respond to Mumbai Partners' lawsuit against the sales representative?

The Indian court enjoined the sales representative from marketing MedPro oximeters.

What has been the status of Mumbai Partners' sales after the termination of the contract?

Mumbai Partners has continued to sell replacement probes to existing customers but has made no new sales of oximeters.

Why did Mumbai Partners file a lawsuit against MedPro in federal district court three months ago?

Mumbai Partners filed the lawsuit as a response to the contract termination and the alleged scheme involving the sales representative and MedPro's manager.

What role did the mediators Dwight Golan and Marjorie Aaron play in this dispute?

Dwight Golan and Marjorie Aaron were mediators working with different groups of litigants to resolve the dispute between Mumbai Partners and MedPro.