Unit5

Unit 5 Assignment

Case Study

Leslie Pimentel

Business Law

Breach of Contract

Breach of Contract

Charlize Theron has settled the $20 million breach of contract lawsuit against her, according to papers filed in Manhattan Federal Court Monday. The suit was filed last year, when Swiss watchmaker Raymond Weil claimed that Theron had worn a Christian Dior watch during a press event in 2006, despite being paid "substantial funds" to exclusively wear Raymond Weil timepieces during the time in question. The contract was allegedly breached during a press event in 2006 when Theron was wearing a Christian Dior watch even though the contract required her to exclusively wear Reimond Weil watches. The contract between Theron and Reimond Weil had specifically required Theron to wear Reimond Weil during public appearances. The wearing of the watch of a competitor is a material breach of contract.

A breach of contract is the nonperformance of a promised duty. A breach is material when performance is not at least substantial. If there is a material breach, the no breaching party is excused from the performance of contractual duties and can sue for damages caused by the breach. If the breach is minor, the non- breaching party’s duty to perform may sometimes be suspended until the breach is remedied, but the duty is not entirely excused.

Once the minor breach is cured, the non-breaching party must resume performance of the contractual obligations that had been undertaken. Any breach entitles the non-breaching party to sue for damages, but only a material breach discharges the non-breaching party from the contract. The policy underlying these rules is that contracts should go forward when only minor problems occur, but contracts should be terminated if major problems arise. A contract may be discharged by complete performance or by substantial performance. This called a material breach because it will enable Reimond Weil to collect damages because of the breach. Theron...