Wednesday, November 28, 2012

ACC v. University of Maryland College Park

http://apps.washingtonpost.com/g/documents/sports/acc-vs-university-of-maryland-college-park/154/
 
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  I mean, the 22 million Maryland agreed to was superseded, and how exactly do you prove “damages” from someone leaving your conference (especially if your conference still exists and just picks up another good team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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