Some people say a verbal contract isn’t worth the paper it’s written on. But even if you have a written contract, things can still go sideways. We’ve gathered some of the most entertaining real-life commercial and individual contract disputes we’ve seen.
Breach of Contract by Dying?
In July of 2018, PayPal sent a letter to a credit loan customer in England informing her she was in breach of contract, leaving an outstanding loan balance of more than 3,700 pounds. The problem? The letter was in response to a notification from her husband that she had passed away. They wrote, “You are in breach of condition 15.4(c) of your agreement with PayPal Credit, as we have received notice that you are deceased.” The letter continued by informing the deceased that “[t]his breach is not capable of remedy.”
This case is unusual because death doesn’t usually trigger a breach of contract, and notifying the deceased about a breach would get the contract parties nowhere. Although in some cases, death allows the other party to declare the contract void. Thankfully, PayPal apologized for their mistake instead of attempting to take a dead woman to court.
Do Friends Really Make Good Business Partners?
According to CNN, a contract dispute over a popular podcast killed a long-term friendship between comedian Adam Carolla and his boyhood friend Donny Misraje. According to Misraje, he pushed Carolla to start a podcast in 2009 after CBS canceled his morning radio show. The podcast was a smash hit, and Carolla offered to make Misraje a partner and give him 30% of his company, Ace Broadcasting Network.
Unfortunately, Misraje never got the offer in writing, but he quit his job making $230,000 a year as a television producer in reliance. Ace Broadcasting also couldn’t pay him until Carolla’s non-compete agreement with CBS expired at the end of 2009, so Misraje went into debt and worked for free. Misraje contended that Carolla cut him out as soon as his podcast started making money, firing him by email, and even changing the name of his company to Carolla Digital. Misraje sued Carolla. The two settled the case for an undisclosed sum during the trial.
Socialite Refuses to Pay Financial Advisor
In 2002, socialite Denise Rich hired Herbert Black, a Montreal-based metals trader and art collector. She gave Black four months to find a buyer for her music business and asked him to manage her finances after her divorce from millionaire Mark Rich left her with a $200 million fortune. Black’s lawsuit alleged he found two acceptable buyers for her company and cut her annual expenses by more than $8 million. Black eliminated expenses such as $250,000 for a professional shopper and party planner, $52,000 for dog maintenance, $200,000 by cutting her number of personal chefs, and $210,000 in savings by cutting her chauffeurs from three to one.
After Black engaged potential buyers and got her finances in order, he alleges Ms. Rich stopped returning his calls and refused to pay his fees. As a result, Black sued for breach of contract, seeking more than $6 million in management and finder’s fees. In his lawsuit, he claimed that he had spurned Rich’s sexual advances, which angered her. When asked about the lawsuit, he said, “I don’t sue for sport — I sue for just cause.” The case is still pending.
Advertising Gone Wrong
In 2013 a bizarre dispute happened between a law firm and a media production company that may or may not have involved a contract. The media production company, Definitive Television, created a commercial that went viral in all the wrong ways. The video produced by Definitive Television for an alleged client law firm contained racist Asian stereotypes. After it appeared on their YouTube channel, the law firm got negative publicity and then claimed their account was “hacked” and took the video down. But Definitive Television refused to take it down off their channel with more than a quarter of a million views.
After the law firm claimed they’d never approved the spot, Definitive doubled down, insisting an intermediary hired them and that the law firm wrote and submitted the script. They offered to take it down if the law firm admitted that they’d hired them. We couldn’t find any legal resolution to this dispute, but the video is still up on the Definitive Television YouTube page, with more than half a million views.
Is Baseball America’s Favorite Pastime? Or is it Litigation?
In 2002, a disgruntled fan sued the Seattle Mariner baseball club for breaching his season ticket contract and violating his right to free speech. Anthony Ercolana claims the Mariner’s executive vice president called him and told him to keep it down while heckling the visiting team, or he’d have to give up his two $32,000 Diamond Club season tickets. The tickets were in the fifth row, right behind home plate.
Ercolana filed suit to preemptively prevent the Mariners from ejecting him from the stadium or revoking his tickets. He claims he never uses foul language or insults the players’ families, stating, “I believe in being loud at a baseball game.” We couldn’t find any status updates on this case, and the parties may have resolved their “loud” differences. It is worth noting that the First Amendment protects free speech from state action. It does not, however, protect speech from the actions of a Major League Baseball team.
Don’t Drink and Deal
Our last strange case goes back to the year 1954 in the Commonwealth of Virginia. In Lucy v. Zehmer, 196 Va. 493 (1954), the Lucys sued the Zehmers to enforce a contract where the Zehmers agreed to sell their Virginia farm to the Lucys. After they’d had several drinks, Mr. Zehmer created a handwritten document that read, “We hereby agree to sell to W. O. Lucy the Ferguson Farm complete for $50,000.00, title satisfactory to buyer.” Zehmer later argued he’d been drunk and thought it was all a joke when they wrote up the agreement. Unfortunately for the Zehmers, the Virginia Supreme Court found an enforceable contract and ordered specific performance. It’s a cautionary tale not to drink and deal and never to joke about a contract.
If you’re facing a potential contract dispute, our business attorneys can guide you through your legal obligations, offer practical advice, and work to resolve your dispute. Contact us today to get started.