NIL Module 4
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School
Boston College *
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Course
008
Subject
Law
Date
Feb 20, 2024
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docx
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UCLA's potential recovery of the $67.5 million settlement with Under Armour hinges on the contract's validity and enforceability. Key facts favoring UCLA include Under Armour's unilateral termination of the 15-year, $280 million deal in June 2020, citing UCLA's alleged failure to provide "marketing benefits." This termination raises questions about its legal justification. Additionally, the force majeure clause invoked by Under Armour, citing the COVID-19 pandemic, is subject to scrutiny. If UCLA can show that Under Armour's termination
lacked legal grounds and the force majeure claim was improperly applied, their case for recovery
strengthens.
Both parties may argue that the other failed to fulfill contractual obligations. Under Armour might claim UCLA did not provide agreed "marketing benefits," while UCLA could argue that Under Armour unjustly terminated the contract. Consequences for breach should align with contract law principles. If Under Armour's termination is deemed unjustifiable, compensatory damages might be awarded to UCLA. Conversely, if UCLA failed in providing marketing benefits, Under Armour may seek remedies outlined in the contract.
Under Armour's defense may center on the force majeure clause during the pandemic. Convincingly demonstrating the pandemic hindered UCLA's marketing obligations could be a valid defense. However, its effectiveness depends on the force majeure clause specifics. Under Armour's claim about the logo covering could be strengthened if they prove it materially affected
their brand image, constituting a breach by UCLA. To strengthen UCLA's case, emphasizing Under Armour's unjustified termination and challenging the force majeure claim is crucial. Demonstrating UCLA's readiness to fulfill obligations despite the pandemic weakens Under Armour's defense. From Under Armour's perspective, highlighting the impact of UCLA's logo covering on brand image could strengthen their position. Fairness demands weighing these arguments against the legal justifiability of the termination and proper application of the force majeure clause. A fair ruling would balance both parties' interests, considering the circumstances
and legal merits.
To ensure a fair ruling, the court must meticulously analyze the actions of both parties in line with contract law principles. The examination should determine whether UCLA failed to deliver agreed marketing benefits or if Under Armour prematurely terminated the contract without valid grounds. Specific attention should be given to the force majeure clause, ensuring it covers pandemic-related events and assessing whether UCLA's ability to fulfill obligations was genuinely hindered. The court must also scrutinize the impact of UCLA covering Under Armour's logo with social justice patches, weighing whether it constituted a material breach that significantly harmed Under Armour. Fairness necessitates considering the broader context, including the unprecedented challenges of the global pandemic.
A fair resolution might involve a compromise, with UCLA acknowledging any shortcomings during the early pandemic stages but emphasizing readiness to resume obligations. Under
Armour could recognize pandemic challenges while acknowledging UCLA's ongoing obligation to fulfill contractual duties to the best of its ability. Monetary compensation could be adjusted based on the court's evaluation of losses incurred by both parties. The settlement amount agreed upon in May could serve as a starting point, subject to adjustments based on the legal merits. This approach aligns with fairness principles, fostering an amicable and mutually beneficial resolution.
UCLA's recovery of the $67.5 million depends on the court's interpretation of contractual obligations, the force majeure clause, and the pandemic's impact on both parties. A strong case for recovery exists if UCLA can demonstrate that the force majeure clause covers COVID-19-
related circumstances, preventing them from fulfilling marketing benefits. If the court deems Under Armour's termination premature and not justified under force majeure, UCLA could argue
for compensation. To evaluate if either party failed to uphold their agreement, the court must scrutinize UCLA and Under Armour's performance against contractual terms, considering UCLA's obligation for marketing benefits and Under Armour's commitment to financial support within the force majeure context. If the court deems UCLA's actions during the pandemic a legitimate consequence of force majeure, a ruling in favor of UCLA is plausible. Conversely, if Under Armour proves UCLA's logo covering as a material breach impacting brand image, it may
have a valid claim.
A potential defense against Under Armour's claim involves challenging the assertion that logo covering constituted a material breach. UCLA may argue its actions were a reasonable response to societal context, emphasizing social justice commitment and the temporary nature of logo covering. The defense could highlight force majeure, asserting Under Armour should have allowed reasonable adjustments during unprecedented events like a global pandemic. To strengthen UCLA's position, evidence of force majeure's impact on marketing benefits provision is crucial. Emphasizing global acknowledgment of pandemic challenges could bolster their case. Under Armour, in turn, should provide concrete evidence of brand image damage due to UCLA's
actions. Weakening Under Armour's claim involves challenging termination validity based on force majeure and emphasizing UCLA's commitment to fulfilling obligations post-pandemic conditions.
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