Jay Z, real name Shawn Carter, is being sued by Parlux Fragrances for allegedly failing to promote a fragrance line that Carter launched in 2013 in a partnership with Parlux. The signature fragrance, called Gold Jay Z, was supposed to be promoted through a minimum of six different appearances by Carter but so far, he has turned down every high-profile interview or social opportunity that the company lined up.
The cost of this alleged breach of contract? A solid $20 million. Even for someone with the depth of pockets that Carter has built up, this one could sting—pointing out the importance of always making sure that you follow through on contracts you’ve entered into. This goes for both sides of the contract, as both are generally prone to lose something on a breach. In the case of Parlux versus Carter, Parlux claims that sales of the fragrance have been significantly hurt due to Carter’s refusal to promote while Carter stands to lose $20 million, and more for his legal defense costs, depending on the outcome of the suit.
Lay It Out
So, how do you avoid contract breaches? There is no fool-proof way, of course, since you can’t control the actual actions of other parties, but the best first step is to have a solid contract itself. There are two main elements to most contracts: a clear agreement between the parties and the promise to exchange something of value for something else of value. Depending on what State you’re making the deal in, the contract may or may not have to be in writing; though it’s always advisable to do so anyway. Also make sure that all parties are of “sound mind” (i.e. was not signed at 2a.m. in the nightclub after a long night of partying) when the contract is agreed upon, and that the contract only deals in legal purpose—i.e. the contract cannot deal with illegal substances or acts. All terms needs to be specific and understood by all parties, or any potential enforcement down the road may be difficult. As a rule of thumb, have your corporate counsel draft and review any contract worth more than $10,000.
If you'd like to read more articles by Jeana Goosmann, follow her blog here or on JD Supra here. If you have any questions on the above, don't hesitate to contact Goosmann Law Firm below.
Let Us Know What You Thought about this Post.
Put your Comment Below.