Contractual enforcement leads to race date being confirmed
The Formula 1 race in Texas--one of only two in the United States, along
with one in New Jersey--is back on, thanks to a contract dispute that
has finally been settled. On December 7, negotiations between Circuit
of the Americas promoters and Formula 1 management ended successfully
with a formal announcement.
Contractual enforcement led to the $25 million sanctioning fee check being received by the Formula
1 CEO. Disputes about the contract between the track's original race
promoter and Formula 1 management eventually led to a contractual defense
being required. The dispute was over the $25 million sanctioning fee that
had yet to be paid.
The dispute also led to construction being halted on the F1 racetrack in Texas on November 15. According to the formal statement issued, construction on the track will begin immediately to meet the November 2012 race date. A loose promise by the state comptroller threw the entire deal into question when she sent a letter stating that the $25 million would be paid to Formula 1 Championship Limited no later than July 31, 2011.
The comptroller also stated in the letter that the sanctioning fee would
be sent every year before July for 10 years, making a total contribution
of $250 million from the state's Major Events Trust Fund. On November
23, the Texas Land Commissioner called for the Texas Attorney General
to investigate the comptroller's actions. The Land Commissioner argued
that the comptroller had overstepped her legal authority, potentially
placing the Formula 1 deal and other deals of the same nature into question.
Contractual enforcement led to the deal being completed successfully. In New Jersey and elsewhere, disputes like these can lead to contractual defense being necessary. While judging the exact stipulations of a contract can be difficult, help in this area is not out of reach. Speaking with someone who can assist in contract disputes may be necessary to ensure that the stipulations of the contract are met.
Source: Community Impact Newspaper, "Formula 1 November 2012 race date confirmed," Bobby Longoria, Dec. 7, 2011