Anticipatory Breach of Contract

Between that and the FOIA Requests that must be piling up at all the public universities right now, this is going to be fun. I suspect the nation’s University administrators just learned a lesson my first Legislative Director told me over a decade ago :

“Don’t put anything in e-mail you don’t want to read on the front page of the Washington Post”

Just change out the Post for Barking Carnival and friends.

Nice Find.

Its called settlement.

LoneOptimist -
 
Definitely could happen.
 
Can Colorado even afford a settlement payment? The program is destitute. And unlike Nebraska, they won’t recoup their money with a more lucrative contract in the Big 10.

… and in this corner, representing The University of Texas and Harvard Law School, Bill Powers. And, in the opposite corner, representing the University of Nebraska and its law school, Harvey Perlman. Wonder who’ll get more bang for the buck?

A party is only permitted to anticipatory breach when the other party has stated unequivocally that it won’t perform. I.e. you can’t breach if you just think that the other party won’t perform. I.e. Nebraska and Colorado have no case whatsoever on those grounds. But you’re right the legal battle will be fun to watch.

No better than the land-thieves.

And don’t they know how many lawyers UT churns out?

Let’s see what we’ve got here, “anticipatory breach of contract” and “unclean hands”? Sounds like someone is a lawyer.

Looks like Scip’s adderall shipment came in and we are better for it.

I’m sure I received credit for taking a contracts class at some point in law school, but I must have slept through the lectures. I paid a lot of attention during my “Law and Film” seminars, though.

I doubt Scipio is a lawyer. No lawyer has ever heard of self-depricating humor. They like to make fun of everyone else, just not themselves.

And Brickhorn has to ruin it for me!

How much money would Nebraska and Colorado owe? ~$4M for each Big XII-2 school?

I wonder how much this $4M payday influenced the decision to kill the Pac 10 deal. If UT thinks UNL can tie up the payday in court, I wonder if that’s enough to send UT, OU, Tech and OSU to the Pac 16.

Sorry, still holding out hope. :-)

/We should settle with Nebraska, then bolt to the Pac 10, just to irk UNL’s fanbase.

oooh ooooooohhhhh! I have an idea.

Texas can play ACE Cash Express to the other members of the Tornado Alley Conference.

Seeing as we don’t need the money and are probably the only school with the resources to litigate the hell out of this thing, we go ahead and pay Baylor et. al. a guaranteed percentage of what they were to receive from Colorado and Nebraska (say, 50%), in exchange for the right to keep the entire settlement amount (which we won’t get for about 3 years). We could net a cool $6 – $8 million.

Slept through LEB 333 in Business School. Figured if I was going to work on Wall Street knowing more about the law would just slow me down.

Being the holder of the cash is as powerful as any law. Nebraska – and more specifically Colorado probably need that for their operating budget. Holding back funds is a much better bargaining position.

Bingo, Newy.

I think the Nebraska-linked post above was quite funny. Anticipatory breach on behalf of Texas?

Q: “So, Texas, if the other parties breach the contract first, will you then anticipatorily breach?”

A: “I cannot commit to that…”

C&N will withhold their breach payments and the BigXII will withhold the TV revenue. Demand letters will fly, private mediation / arbitration will ensue, and the thing will settle out of court.

I doubt any of the sides wants to make all of this public record.

Unclean hands is an equity concept. Equity is good for when the remedy sought isn’t money. Contract law should suffice here. And no anticipatory breach, either. I’m not an expert on anticipatory breach or the Big XII’s bylaws, but Nebraska’s hunch that Texas might leave doesn’t give them the right to walk away from the Big XII and the other unwanted (I mean, loyal) members. Nice try, though.

Scip, this is how the story of the Big 12 formation became public. The trial of the A&M regent over his use of school planes put Billy Clayton on the stand, and he told how Bob Bullock engineered the whole thing.

Equitable defenses are the last stand for the defeated. The fact that Texas openly tried to keep the league together and in fact did will make it difficult for NU to prove (yes, that will be NU’s burden) that Texas and enough teams would bolt other than NU and CU to wipe out the league. Remember, Osborne publicly stated that 2 teams leaving wouldn’t destroy the Big XII.

Who needs cable when you’ve got the drama of conference realignment?

The real positive of all this fubar – it’s making the “off” season go a lot faster.

Buncha lawyers on this site…

Can’t wait til we get to talk some actual football again.

I know I’m about to stick my toe into the smart kids end of the pool so be lenient. If it comes out in a trial that UT, OU, A&M or any combination of the three were talking with other conferences for several months would that aid Nebraska in its claims?

Re: us talking with other conferences. Keep in mind these legal terms are probably being bandied about by people who don’t practice law.

In this scenario, unclean hands doctrine could be a defense to a request for equitable relief. So if Nebraska sues and asks for some kind of injunction on the league’s garnishing the revenue, unclean hands could conceivably be raised by the league. Basically, it means a plaintiff can’t ask for equitable relief if they acted in bad faith. Might be a winner for the good guys.

Anticipatory repudiation means that a party to a contract who made a promise has stated he will not fulfill the promise. So, that gives the other party to the contract, who is about to perform but now knows it will no longer receive the benefit of the promise, the right to not perform. But along with that right comes the responsibility to mitigate the damages.

Sorry for the long explanation. But hopefully, you can see this works well for merchants trading goods and services, and not so well for bylaws signed by twelve universities, none of which informed Nebraska they would not perform their Big XII obligations.

Short answer = The Nebraska argument is bullshit and we can talk to whomever we like.

PS – I’m not admitted in any Big XII state, and this is all theoretical and not to be relied upon in any way.

So if it comes out that Nebraska was talking with the Big 10 for longer than they publicly made it seem then they’re screwed?

I’m nothing more than the Oklahoma State blogger so it’s important to me. Whatever share of the money we end up with is more valuable to us than most of our southern partners.

side note: not taking the small 5s penalty money seems like a small price to pay for at least some attempt at a decent relationship between the schools. We’ve freely admitted we’d rather be your friend what ever it takes, but the other schools get to vote too.

Thanks for everyone’s help.

Personally, I think Nebraska and Colorado are screwed on this point either way. They left, so they pay the liquidated damages (or whatever the league calls it). Of course, they want to sway public opinion in a weak attempt to get some money back. But the league holds all the cards on this issue, and it sounds like Beebe’s deal brokering relies on taking a hard line here.

Revenue sharing was already unequal, so I don’t see why it should be at all controversial for the “small 5” to offer and the “big 5” to accept the penalty money as an incentive to keep the league together. Everyone benefits, some more than others. This concept helped build our fine society.

Who knows the state flag in that clip?

All the rumors say the Big 5 weren’t offered the penalty money, the big 3 were. Not OSU or Tech, I’ve got no problem with unequal revenue distribution, it gives OSU an extra incentive to invest and compete.

Don’t get me wrong. I hope NU gets beat. It’s in OSU’s best interest that they do. But is the league really damaged if we double our per team revenue as a ten team league and not 12? Or go ahead and explain liquidated damages to me while you’re at it,

This leads to my next question. Do we measure Beebe in liters or gallons of shit? He’s full of it.

Tennessee

Link

Liquidated damages are a sum provided by contract instead of proven damages. Legally available when damages difficult to quantify and the sum bears some resemblance to what the damages might be.

Here’s the rub, imo: if NU and CU are party to a contract that provides liquidated damages that contract is with the Big 12 not it’s individual members (at least I find the latter difficult to believe). In that case NU would have to prove the Big 12 stated or implied an intention not to perform it’s obligations, not one or more members.

If Perlman is representative of NU legal minds, I’m not impressed. All the posts noting that the mere possibility of nonperformance does not give rise to repudiation doctrine are spot on, imo, in addition to the basic problem identified above.

Seeing as we don’t need the money and are probably the only school with the resources to litigate the hell out of this thing, we go ahead and pay Baylor et. al. a guaranteed percentage of what they were to receive from Colorado and Nebraska (say, 50%), in exchange for the right to keep the entire settlement amount (which we won’t get for about 3 years). We could net a cool $6 – $8 million

This is “found money” so it’s not like other schools need this in their operating budget. Every school can use it, but nobody’s athletic department is absolutely banking on it to keep afloat. Therefore giving 50% now to keep 100% later won’t go over well.

Under Texas law (which likely doesn’t apply, but is nonetheless illustrative), an anticipatory breach occurs when one party indicates by unconditional words or actions that it will not perform its contractual obligations. More importantly, if the repudiating party notifies the other side (i.e. Nebraska) that it intends to perform notwithstanding its previous words or acts and the other side (Nebraska) hasn’t materially changed its position in reliance on the previous repudiation, the defense of anticpatory breach will be hard to win.

This is just a general statement of the law and the facts and circumstances may create new issues, but NU will have a hard time showing that the Big XII members had repudiated the Big XII contract and even if they did, Texas’s proclaimed prior to NU’s application for membership to the Big 10 that it would stay if NU stays.

Isn’t there a more fundamental point that has not been raised regarding anticipatory repudiation — that, even assuming Texas and not the Big 12 was the contracting party, Texas never threatened a breach. Moving to another conference is not a breach of the contract. Moving to another conference without giving the required notice and forfeiting the applicable revenue is the breach.

To me, at most, Texas flirted with other conferences. But I do not see a case for anticipatory repudiation unless Texas threatened to leave and threatened not to give notice or forfeit revenues. In other words, the parties had the legal right to , under the contract, so long as the followed the procedures in the contract. Texas never threated that it would not adhere to the contractual procedures here.

I am interested if the controlling law or the contract itself allow the prevailing party to recover attorney fees. I bet one or the other does. If so, given Nebraska’s very lame arguments, I would not settle for much of a discount. They will end up paying both party’s attorney fees, damages, and interest.

I also wonder if there is an arbitration clause or forum selection clause. The bylaws I found online were not complete.

Man, if Nebraska and Colorado plan to go this route…do you think the game officials will realize that the Huskers and Buffs are the enemy?

Have the 2009 tv revenues already been distributed? If so, then the conference can hold back the 2010 tv revenues, but would still have to go after CU and NU for the difference, correct?

@ TTR – The Corn Heads already BELIEVE that there’s a pro-UT conspiracy concerning officiating. I’d be surprised that, in the interest of leaving Lincoln alive, the refs don’t make most/all calls in NU’s favor when Texas comes to visit.

Horncasting -
 
Revenue checks are sent out in June. In two weeks, expect all hell to break loose. The league WILL withhold and I can tell you that Colorado may not be able to water its own grass without that cash.

Colorado may not be able to water its own grass without that cash.

And that really means something in Boulder.

At the time all this went down, I assumed Colorado taking the first slot was all part of the plan. I figured it was simply a way to deal with the Baylor problem that everyone was onboard with. Call me a skeptic, but I’ll still be somewhat surprised if that wasn’t the case. Everything we were told indicated everyone was gone if Nebraska bailed. So Colorado could still have some cards to play before this is over.

The real weakness for the league will be the attempt to enforce the liquidated damages provision. If memory serves (and admittedly it does so less well each day), such provisions can be discarded as unlawful penalties (or “forfeitures”, which cases tell us the law abhors). In this case, NU and CU will make every effort to show that the the penalties are actually forfeitures because there’s no real loss of income to the remaining schools — in fact, according to the Beebe Manifesto, they’re actually going to make more thanks to the lowered dilution of the pot.

Now, that doesn’t mean such evidence SHOULD be considered in assessing the enforceability of the liquidated damages provision, but that bell will certainly be rung and diminishing the echo may prove difficult.

heya, is it possible that modafinil can tune up the IQ???