Thursday, September 3, 2009
One issue in the dispute, discussed below, between Washington Redskins fans and the team is the team’s duty to mitigate damages when it resells tickets reclaimed from defaulting seasons ticket holders. Some of the Redskins fanned interviewed for the Washington Post story decried as “double dipping” the Redskins’ practice of collecting full damages for unused tickets and then reselling the tickets and collecting again.
Alas, as reported in Connecticut Sports Law, in NPS, LLC v. Minihane, 451 Mass. 417 (2008), the Massachusetts Supreme Judicial Court enforced a liquidated damages clause in a ten-year agreement for club-level seats at New England Patriots games. The defendant in that case was ordered to pay damages for the full value of the ten-year contract, although he had only used the seats for one year. The trial court had struck down the liquidated damages clause as “grossly disproportionate to a reasonable estimate of actual damages made at the time of contract formation.”
The Massachusetts Supreme Judicial Court reversed, based on a finding that the damages would have been difficult to ascertain at the time the parties entered into the contract and that the liquidated damages clause represented a “reasonable forecast of the damages expected to occur in the event of a breach.” The court reasoned that the team could not predict in advance how long it would take them to resell the seats. In light of the benefit defendant would have enjoyed of having guaranteed seats for ten years without the threat of a price increase, the court found that the damages clause was not “unconscionably excessive.” Once the liquidated damages clause was found to be enforceable, mitigation evidence was deemed irrelevant.
[Jeremy Telman – HT again! Zachary Calo]