Lack of contractual enforcement leads to America's Cup dispute


Many New Jersey residents enjoy sports because they are supposed to be a fun activity. However, it's no fun when organizers aren't happy and cause a dispute. Case in point: The America's Cup yacht race. A dispute over merchandising has caused a $4.2 million headache to the organization.

The Golden Gate Yacht Club is the formal holder of the event and also the sponsor of one of the competitors, Oracle Team USA. However, the America's Cup Event Authority is the organization putting on the event, which finishes up in September. Gameday Merchandising International is filing a lawsuit against America's Cup Event Authority for lack of contractual enforcement. It claims that America's Cup Event Authority took away their merchandising agreement, which was signed in March 2012.

Gameday Merchandising International is seeking a judge's order to make Golden Gate Yacht Club responsible for paying them money from the dispute. Gameday is seeking $4.2 million in damages. However, it is possible that Gameday won't receive anything from the suit, because the event authority will likely terminate once the America Cup ends.

In addition, America's Cup Event Authority alleges that Gameday's contract was terminated because the company created merchandise without approval and used unauthorized retailers. The contract dispute is just one of many problems that the America's Cup has faced this year, including lopsided races and the death of a sailor.

Unfortunately, even when contracts are in place, issues can still arise. A lack of contractual enforcement is considered a breach of contract and can result in lawsuits and other legal issues. When the contract is breached, the wronged party can request damages.

Source: San Francisco Chronicle, " Contract dispute adds to America's Cup troubles," John Coté, Aug. 28, 2013