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Valparaiso Univ. Law School

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Thursday, January 27, 2011

A Heroic Breach of Contract

Meche As the New York Times reports today, Gil Meche (pictured), until recently a pitcher for the Kansas City Royals, has breached his contract.  He was due to be paid $12 million for the 2011 season, but he has a bum shoulder, and he has chosen to retire rather than to be paid what he called "a crazy amount of money for not even pitching."  As the Times points out, Meche's decision is not entirely without precedent, but in most cases, injured players go through the motions of surgeries and rehab even when they have little hope of returning to the game.  Baseball management does not expect them to retire -- career-ending injury is simply a risk assumed by management when it enters into guaranteed contracts with ball players.  

Why did Meche do it?  He says he did it because he didn't feel right taking more money from a team that had already given him over $40 million.  The Royals had signed Meche in 2007 to a five- year, $55 million contract, and they were widely criticized for having done so.  Meche seems to be very grateful to a team that believed in him when others did not.  He wants to retain his dignity, free up some cash for the organization, and (this is inevitable) spend more time with his family.

It's a wonderful story.  I wonder what other professional athletes think of this.  After all, although the players are well paid, they are still the employees of fabulously wealthy professional sports franchise owners.  Meche's decision could become a precedent that the Steinbrenners of the world could wield to exert pressure on their aging stars to go gently into the good night of minor league coaching or whatever.

[JT]

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Comments

Interesting perspective to see this as a breach of contract. Is that technically right, though? Do player contracts not allow the player to resign, for medical reasons or otherwise? If it is a technical breach, what would the team's damages be, technically speaking? They actually save millions of dollars.

Posted by: Lawrence Cunningham | Jan 27, 2011 2:04:25 PM

Quite right. I don't think it is right to call this a breach of contract. I was trying to be wry.
He's just walking away from a deal and leaving a ton of money on the table. No damages, so no breach, I would think.
You raise an interesting possibility though. What if a player who is being underpaid compared to his value to the team wants to resign because he claims he is injured, but the team thinks he is malingering? Could the team then sue for cost to the team of getting another, e.g., right fielder? If so, in some circumstances, resigning due to injury could be construed as a breach of contract.

Posted by: Jeremy Telman | Jan 27, 2011 3:06:18 PM

Hi. I disagree with you that the authorities should not classify this case as a breach of contract. I will admit that this is an unusual case because the Kansas City Royals is benefiting from its pitcher's breach and we usually hear about the innocent party being injured. A breach of contract occurs when one party breaks a term or condition of the agreement. In the case at hand, in 2007 Gil Meche contracted with the Royals for a pitcher's position that was to last for five years. In 2011 - about a year before the contract expired, he cancelled it. Thus, Meche breached the contract.

With respect to Meche's defense, he could not respond to the allegation with no breach - compliance, no breach - excuse, no breach - justification, or no breach - terminated duty. First, in no breach - compliance, he failed to comply with the five-year term because he cancelled the contract. Second, in no breach - excuse, the contract allocated for the risk of a shoulder injury so the injury was not an unexpected event. Third, in no breach - justification, the Royals did not breach the contract and so a proceeding event did not justify Meche's breach. Fourth, in no breach - terminated duty, his pitching duty did not expire until 2012 so his duty was not terminated.

Despite how unusual this case is, the authorities correctly classified it as a breach of contract.

I also disagree with you that no damages are available. The Royals could seek incidental damages for the expense associated with finding another pitcher and nominal damages to show Meche that he had a contractual duty and was wrong to break it. Restitution is also available because the Royals conferred a benefit on Meche in the amount of $40 million. Because he thought the amount of his salary was absurd, I am guessing that the awarded amount would be significantly less.

Technically, this is a breach of contract case with damages available. That's just my analysis. Thank you.

Posted by: Adah Marie Guy | Feb 7, 2011 3:33:35 PM

I think we will have to agree to disagree on damages, and as damages are an element of a claim for breach of contract, there can be no claim without damages.

Nobody is claiming that the Royals did not get the benefit of their bargain when they paid Meche $40 million for his past performance. The only issue is the $12 million he is owed for 2011. I don't see any way to claim damages when Meche is saving the team $12 million by walking away. Even if one could argue that they now have to pay someone else to pitch in Meche's stead, they would have had to do that in any case, since Meche is injured and would not be able to pitch even if he were willing to continue to be paid.

JT

Posted by: Jeremy Telman | Feb 7, 2011 9:48:54 PM

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