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Honeywell settles breach of contract dispute with city government

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Conserving energy is an important concern for many in society nowadays, especially for those who are worried about the environment. There is also a financial incentive for conserving energy as well, since wasting unnecessary energy can needlessly cost individuals, companies and even governments significant amounts of money. One company, Honeywell, has created a reputation for providing energy-efficiency solutions and has applied this to serve the government sector. However, one city government client in Massachusetts was unhappy with the company's services and claimed that Honeywell had committed a breach of contract.

The city government hired Honeywell to upgrade the city's infrastructure in order to make the city operate more efficiently from an energy perspective. The dispute began when Honeywell decided to install 600 new water meters. The company argued that replacing the water meters was not unusual and that more accurate energy usage measurements can significantly assist in energy conservation.

However, the city government disagreed and claimed that replacing the meters violated the contract between the city and the company. The city threatened a lawsuit; however, the company was able to come to an agreement to settle the lawsuit for $4 million. The settlement resulted in the termination of Honeywell's contract to perform maintenance, which leaves the city responsible for maintenance of all equipment installed by the company.

Although in this case, the two parties of the breach of contract dispute in Massachusetts were able to come to a settlement agreement, many times contract disputes may be forced to be litigated in a court of law. This means that both sides will have to argue their side of the story in front of a court judge. It is important to properly understand contract law and the intricacies of business law in order to formulate a strong legal argument.

Source: Pioneer Press, "Honeywell to pay $4M in water meter suit," Leslie Brooks Suzukamo, Jan. 15, 2013

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