On Monday, the Massachusetts Supreme Judicial Court heard what figures to be the final episode in a case that pitted the New England Patriots against a season ticket holder seeking to escape from a long-term ticket contract.
A few months after the Patriots’ first Super Bowl win in 2002, Paul Minihane signed a 10-year contract for premium club seats at Gillette Stadium. The seats cost $3,750 each, per season – $75,000 over the term of the contract. After one season Minihane began missing payments and the Patriots brought suit. A Massachusetts Superior Court found that the Patriots were entitled to $13,500. However, the Patriots seek the full $75,000 and have appealed to the highest court in the Commonwealth.
A brief review of contract law is helpful to place this story in proper context. A breach of contract claim requires four basic elements:
- A valid contract;
- Performance of the contract by the plaintiff;
- The defendant’s failure to perform; and
- Resulting damages to the plaintiff.
In this case, the first three elements of a contractual breach are evident. However, the case turns on whether the Patriots have actually been damaged. It is common knowledge that the Patriots’ season ticket waiting list includes enough fans to fill the old Foxboro Stadium, if not another Gillette Stadium. So how are the Patriots damaged if they can simply sign another contract with the next customer in line? Moreover, with ticket prices seemingly increasing each year, couldn’t the Patriots make more money by signing a new contract with a willing customer?
If the Patriots did in fact resell Minihane’s seats, their claim that they were damaged to the tune of $75,000 would be tenuous at best. In the alternative, if the Patriots did not attempt to resell the seats, they could be vulnerable to a failure to mitigate damages defense by Minihane. Certainly the Patriots have an availing claim for the incidental costs of entering into another contract with a new customer for Minihane’s seats. These incidental damages are reflected by the Superior Court’s award of $13,500. However, it is hard to imagine a court allowing a Patriots’ windfall.
Perhaps the more interesting element of this story is not the legal, but the practical perspective. Why did the Patriots choose to spend money on legal fees when they simply could moved on to the next customer, presumably at higher prices? Although the Patriots have taken hard-line legal positions with Stub Hub and season ticket holders that exhibit objectionable behavior on game day, this case appears to be of little precedential value to the Patriots.
Stay tuned for the decision of the Massachusetts Supreme Judicial Court in this case.
It is well known that the waiting list is long. But perhaps such a long line does not exist for the $13,500 seats. The pats may be attempting to set a precedent (against an individual premium ticket holder) so to disincentive those large corps. who may wish to bail on their suite contracts at some point.
I spoke with General Counsel for the N.Y. Jets yesterday. His take was that the Patriots’ lawsuit was pretty common among NFL teams. Also, with respect to club seats, he surmised that breaching a long-term ticket contract might have implications on a team’s financing of a new stadium. Essentially teams guaranty that they will bring in a certian amount of revenue. If a percentage of club seat holders breach their contract, the team is no longer guaranteed that money. Another issue is that the Patriots ticket contract may contain a clause to get around the lack of damages argument. These clauses are often referred to liquidated damages or accelerated damages clauses. Generally, courts have held that such damages must be reasonable and not punitive.
[...] Comments The Massachusetts Supreme Judicial Court ruled in favor of the New England Patriots in a legal dispute over a season-ticket holder’s breach of his 10-year ticket contract. The Court held that the contract must be upheld and the ticket [...]
About this topic, http://www.twitter.com got accounts phished on sunday. Seems that nothing is unbreakable.