Breach of Contract & Subsequent Lawsuit Settlement

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Table of Contents

Introduction
How the contract was allegedly breached
The defenses that might be available for the defendant
The remedies that might be available for the plaintiff
Conclusion
References

Introduction

A breach of contract can be described as a legal cause of action in which one or more of the parties has failed to honor a valid agreement or a bargain-for exchange, usually as a result of a non-performance or intrusion with the performance of the other party (Culhane, 2012). If a party fails to fulfill his side of the contract or informs the other party that he is not able to perform his duty, then he is said to have breached the contract (Culhane, 2012). This paper seeks to analyze a story regarding a breach of contract and the subsequent lawsuit settlement. The paper will specifically establish how the contract was allegedly breached; determine the defenses that might be available for the defendant; and the remedies that might be available to the plaintiff.

How the contract was allegedly breached

Charlize Theron entered into a binding contract with Raymond Weil, a swizz watchmaker, to wear the company’s timepieces all the time, from October 2005 to December 2006 (Hillemans, 2009). The Company paid a substantial amount of money to the actress for the deal. She was required to wear the watches so that when the paparazzi took photos of her, people would see her with the watch and therefore effectively generating good publicity for the brand (Hillemans, 2009). However, in one of the photos taken during a press event in 2006, Theron was shown wearing a Christian Dior watch (Hillemans, 2009).

It was later established that Theron had entered into another contract with Dior to promote the company’s perfume. Thus Raymond Weil filed a lawsuit against Theron claiming a breach of contract. The company had spent more than 20 million US dollars on Theron who was subsequently ordered to pay the money back by the US Supreme Court (Hillemans, 2009).

The defenses that might be available for the defendant

Ambiguity in the language used by the other party

The defendant can review the wording used in the written contract and flag any statements that might be considered to be ambiguous. For instance, in the current case, Theron can claim that she did not understand that she was required to wear Raymond Weil’s watch all the time as per the wording of the contract (Culhane, 2012). She can claim that she was faulted as a result of the ambiguity in the language used by the other party.

Existence of mutual mistake

The defendant can claim the existence of a mistake on both sides of the contract that prevented the full implementation of the contract. For instance, Theron can claim that she needed a certain number of assorted timepieces to wear for the period specified by the contract and that the company failed to provide them leading to the alleged breach of contract. In such a case the fault will be equally allocated between the defendant and the plaintiff (Culhane, 2012).

Fraud

The defendant can claim the presence of fraud that can render the contract void (Culhane, 2012). For instance, in the current case, Theron can argue that the company lied about the quality of its timepieces. She can provide evidence by stating instances in which the watches had stopped or broken down. In such a case the ordinary elements of fraud such as the false misrepresentation of material fact, made with knowledge and with intent to induce reliance will be required to exempt the defendant from taking the full responsibility of the breach (Culhane, 2012).

The remedies that might be available for the plaintiff

Various damages might be available for the plaintiff depending on the nature of harm sustained as a result of the contract breach. Damages are usually in monetary form and might include compensatory damages that are intended to recompense the non-breaching party for the loss incurred as a result of the breach (LaMance, 2012). This might be in the form of expectation damages and consequential damages (LaMance, 2012). In the case above, Theron is required to pay for both because the company spent a significant amount of money in signing the contract. In addition, the alleged breach caused the company to lose economic opportunities.

Another remedy to the plaintiff might come in the form of specific performance, whereby the defendant will be required to full her part of the bargain by sticking to the initial terms of the contract (LaMance, 2012).

The parties can also agree to cancel the disputed contract and form another one that will meet their needs. However, a lot of publicity has been generated by the lawsuit and therefore contract rescission is the least likely remedy for the plaintiff.

Conclusion

This paper sought to analyze a story regarding a breach of contract and the subsequent lawsuit settlement. The paper has specifically established how the contract was allegedly breached. It has also enlisted the defenses that might be available for the defendant and the remedies that might be available to the plaintiff. The defenses for the defendant might include the existence of fraud, mutual mistake, and ambiguity in the terms of the contract (Culhane, 2012). The remedies for the plaintiff might include compensatory damages and contract rescission (LaMance, 2012).

References

Culhane, K. R. (2012). Breach of Contract Defense Interrogatories: Defendant to Plaintiff. Web.

Hillemans, J. (2009). Swiss watchmaker files breach of contract lawsuit against actress Charlize Theron in New York. Web.

LaMance, K. (2012). Types of Damages Available for Breach of Contract. Web.

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