Friday, June 10, 2011
One of my favorite ways to teach a Contract law concept is to introduce it via a dry traditional case and keep the discussion going by mentioning a more exciting modern case involving a similar issue. Then, I ask students to argue whether the modern case can be distinguished from the traditional case factually, whether the modern case should be decided the same way as the traditional case, etc. Based on recent events described below, the modern version of Wood v. Lucy, Lady Duff-Gordon I use next fall may just be the one and only Lady Britney Spears.
It seems that the sometimes-not-so-ladylike Spears, like Duff-Gordon, had an exclusive licensing arrangement in which she would lend her name to certain products in the hopes that her endorsement would increase sales. The party negotiating those deals for her then would pay her some portion of the licensing royalties. In Spears's case, the go-between was a company called Brand Sense; for Duff-Gordon, it was, of course, Mr. Wood. Under one of the endorsement deals negotiated by Brand Sense, with the fragrance arm of Elizabeth Arden, Spears would endorse the fragrance "Radiance." Brand Sense would collect the royalties from Elizabeth Arden directly, keep its 35% commission, and pass the remaining 65% on to Spears. Like many long-term contracts, all went well for several years until, well, it didn't. Earlier this year, at Spears's request, Brand Sense agreed to have the Arden payments sent directly to Spears, who then would send the 35% commission to Brand Sense. However, no further payments to Brand Sense ever arrived. According to Brand Sense's complaint, this was because Spears "secretly made a separate deal with Elizabeth Arden in a sneaky underhanded effort to circument and evade its obligations to Brand Sense." Thus, Brand Sense argues, Spears breached her contract by not paying the commission and by negotiating a new deal with Arden.
At this early stage, it seems that Spears, like Duff-Gordon, no longer wanted to share royalties with someone she perceived as doing nothing. For teaching purposes, this one's a bit of a stretch given that the primary legal issues in the two cases are different (Spears turns on a standard breach of express contractual promise while Duff-Gordon typically is used to teach the implied duty of good faith and fair dealing and consideration). However, both involve an exclusive licensing arrangement gone bad and a controversial female style maven and that's good enough for me.
As for what happens next in the case...Commentators I expect Brand Sense to argue "I'm a Slave 4 U" and Spears to argue "Gimme More." Earlier this week, Britney fired back with the "Oops!...I Did It Again!" defense and with a cross-complaint in which she alleges improper accounting and delayed payments by Brand Sense. Results to be determined; hopefully, it won't be too much of a "Circus."