Monday, September 22, 2008

Flag Thrown on CIB/City - Colts Contract?

Looking over the 83 page CIB/City-Colts Contract, I noticed the legal phrase "no adequate remedy under the law" being used in Section 4.4(a) on page 21. That is antiquated legal term which says that if the agreement is breached, the parties are not entitled to seek money damages. The parties can only seek equitable relief like an injunction or specific enforcement of the contract. So even if the City is out millionns because the Colts decide to leave the city, we are only entitled to an order forcing the Colts to comply with the Contract.

That provision, directly conflicts with the arbitration requirement in Article 25 (pages 75-78), in particular Section 25.5 (page 76) which says that the remedies to the arbitrator include "both money damages and equitable relief." The arbitration agreement also says that the arbitrators are limited to the terms of the agreement, and the terms include the fact that only equitable (not monetary) relief is available.

Unfortunately if there is a dispute over the contract, it won't be a judge deciding, it will be a panel of three arbitrators. Arbitration is mandatory under the contract. One arbitrator is picked by the City/CIB, one picked by the Colts and a third picked by the other two arbitrators.

While the measurement of damages in a breach of a contract like this is always problematic, the thing to do is not to throw out the idea of damages all together, but rather to establish a liquidated damage amount that the parties agree to in the event of a breach. What lawyers refer to as "specific performance," a court order requiring compliance with the contract, is not an adequate remedy as it might only come several months if not more than a year down the road, long after the City has incurred substantial damages. Additionally, if the falling out between the parties is so substantial that the Colts pack up and leave town, forcing them to move back to the city to resume the strained relationship seems not a very good option. It would be like in a divorce proceeding forcing a husband and wife to resume living together, despite the fact that the husband has moved on and is living with another woman.


Anonymous said...

HMMMMMMM Glad to see you are looking at this thing.

Paul K. Ogden said...

I would have strongly advised my client not to sign it. It's one of the most onesided contracts I've ever seen. It could have been though the city was so gung-ho to do it, they didn't listen to the attorneys. Or the attorneys possibly offered bad advice. Regardless the Colts, much like Joseph Addai, saw an opening and ran through it.

Diana Vice said...

I was beginning to think that the phrase "honest lawyer" was an oxy moron. I have an honest lawyer, but it's nice to see there's another one out there. You've earned my respect. Keep up the good work.

Anonymous said...

It's somewhat tangential, but it seems wrong to me that we permit the conversion of public property for the benefit of private companies without transparent & proportional benefit to the citizen owners; such as pay television's (cable) adverse possession of public property in the form of broadcasts (i.e. Big Ten, IU, Purdue, etc.) that were once available on "free" TV.

Furthermore, the appropriation of logos & university identity products being licensed for profits that are likewise not returned in transparent fashion to taxpayers (the owners), seems very questionable to this very free market minded fellow.