An interesting case. Maryland will
assert that it is excessive liquidated damages and not enforceable because it
is a penalty. Under the old clause, MD would be stuck paying 125% of 17
million = around 22 million. But they will argue that the new $52MM is an unenforceable
penalty and they did not agree to it, one of the reasons being that they
thought it was unenforceable and excessive.
One big question will be whether
it is "liquidated damages" for a breach of contract at all. It might just
be a cost of being in the league. You can be in the league, but if you
leave then there is an agreed upon payment you must make. I would
argue if I were the ACC that it is not a penalty for breach of contract, it is
just an agreed upon cost/payment.
If the penalty is unenforceable,
can the ACC even collect ANYTHING?? I mean, the 22 million Maryland agreed to was
superseded, and how exactly do you prove “damages” from someone leaving your
conference (especially if your conference still exists and just picks up
another good team like Louisville)?
Your upside is $52MM and your
downside is………..$0.
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