Breach of Contract Lawsuit Brought Against Leading Online Pet Supply Company

Business Wire, Sept 30, 1999

LOS ANGELES--(BUSINESS WIRE)--Sept. 29, 1999--

On Sept. 23, 1999, Biolink, LLC dba ERI International filed suit against Pets.com Inc. in the Superior Court of the State of California.

The suit was filed for Breach of Contract, Anticipatory Breach of Contract, Breach of the Implied Covenant of Good Faith and Fair Dealing, and Fraud. The suit seeks damages in the amount of $2,000,000 as well as punitive damages and costs of the suit.

Pets.com is a leader in the online pet supply industry that has recently exploded onto the financial scene. Backed by a major online retailer and significant venture capital companies, Pets.com is considered an "online category leader" in the race to dominate the $23 billion/annum U.S. pet supply market, according to a press release issued on Aug. 16, 1999, by Pets.com.

ERI International is a leading importer and distributor of aquatic livestock. With a state-of-the-art facility adjacent to Los Angeles International Airport, ERI has a well-established reputation as an industry leader. The company has unparalleled expertise in aquatic livestock fulfillment with over seven years of worldwide distribution as well as almost three years of fulfillment experience with the Internet business community.

Robert Miller, the principal of ERI International, says that on Aug. 12, 1999, Pets.com entered into a four-year exclusive distribution agreement with ERI International for the sale and distribution of live aquatic animals on the Internet. Pets.com issued a press release on Aug. 16, 1999, announcing that it had "signed an exclusive agreement with a leading online fish supplier (ERI International) to sell live saltwater and freshwater fish from its Web site." Concurrently, Miller entered into an employment agreement with Pets.com to perform work directly related to developing and implementing the online aquatic animal program for Pets.com.

According to Miller, ERI contends that after they had begun significant performance of the distribution agreement and after Miller had contributed extensively to the development and implementation of Pets.com's online aquatic animal program, Pets.com breached the agreement. ERI is seeking to enforce its rights under the agreement.