Consumer Law, Warranties Verbal Contract

[Rhabdullah]

I work as a private promoter for local venues on the side from my primary profession. Recently I promoted a invitational step show competition in NC. One of the teams that I recruited for this competition was from NY. The 1st place cash prize for the winning fraternity & sorority in this competition was $1000. However, this team wanted to know in addition to us already paying their auto rental & hotel expenses, if we would be willing to throw in an additional $500 bonus for them if they won. I stated that we were not expecting to make a huge profit from this show, so I will have to check our budget to see if I can make any adjustments so that our profit will be large enough to cover this additional charge. I later agreed and said OK. The team did in fact win the competition, but we did not make a profit from the show. Therefore, we paid them the amount stated in the initial contract for $1000, but we did not pay out any bonuses.

The team is now telling me that they did not know that the bonus was contingent on our company making a profit. Therefore, they still were expecting to receive the additional money. I explained to them that there must have been some type of miscommunication somewhere between the two parties, because the initial verbal agreement was in fact, contingent on our company making a profit. Therefore, I figured to resolve the issue I would still issue them 1/2 of the original amount in agreement. However, when I took this matter back to the individuals that financially back my promotional business, they disagreed, and refused to issue the funds to pay this team ANY bonus. They reiterated to me that this agreement was contingent on our company making a profit, and we did not. Therefore, NO funds will be given to this team.

Well, when I informed the team that no money was going to be issued, they threatened to sue if they did not receive their money. Do they have a legitimate case? Even though our thoughts were that this agreement was contingent on us making a profit, and their's were not.

In addition, this team used stage props in their act that had not been officially approved for the competition. Which technically means that the team was subject to be disqualified based on our rules & regulations. We originally awarded this team 1st place & proceeded to pay them $1000. However, this correction was recently identified when we reviewed our rules, after they had already deposited their check. Do we rightfully have a case for a counter suit to enforce them to return the $1000 to our company so that it can be reissued to the rightfull winner.

In using those stage props, not only did they break our rules, but they also disregarded the safety policies and rules of the University whose campus hosted the venue. Not to mention, these stage props caused damage to the performance stage. Therefore, they utterly destroyed our company name with this University, breaking all ties that we had with them. They have banned our organization from presenting ANY more shows on their campus. Do we have a case for also counter suing them for defamation of character?

 

[Michael Wechsler]

From your own words, it seems that you promised the contest winners a bonus and did not relay to them any language that it would be contingent upon a profit being made. You only stated that it would not be likely and would check before confirming that you would provide such a bonus -- and you agreed to provide the bonus. They came to the contest, relying upon your promise. Regardless of contract law, it would seem to me that it is possible that they could claim that they were induced to participate as a result of relying upon your promise. It makes no difference that your superiors said no -- how can you penalize the winners for your failure to explain this to them?

Your failure to disqualify the winners due to breaking rules may be a case of "sour grapes" although I cannot be sure. You may have "waived" your objections to breaches made by them. It seems strange that you would hand the winners a check after they so blatantly disregarded the rules and caused such damage to the stage that you were banned from further events in conjunction with the university. I could be wrong but this is what it seems like for the reader. Was the violation of the rules obvious? It would seem that if the props damaged the stage, they should have been identified in a timely fashion.

My impression regarded what you stated is that you made an unfortunate choice of words in the first instance and hope to escape liability for what you may have meant, although that is not what was stated clearly at the outset. The case of defamation would not be made since no false statement was uttered. The damages would be pursuant to a breach of contract claim. As a case of a verbal agreement (including the rules), this case could be difficult to make.