micropolitan guy
Well-Known Member
@franticscribe
Does this make sense to you? Found it on another site.
"The exit fees and poaching fees that the PAC is supposed to pay to the MWC are known as "liquidated damages" in the contracts world. (Basically, it means that you agree to pay a fixed amount if you breach a contract.) And they are notoriously difficult to enforce.
"Courts usually frown on liquidated damages. They prefer that the aggrieved party prove that they actually suffered X amount in damages as a result of the breach and then sue for X dollars. Case law says that for liquidated damages to be enforceable, they have to be a realistic estimate of the actual damages that the aggrieved party suffered as a result of the breach and not simply a punishment for breaching the contract.
"And given that the MWC is likely to survive as a viable conference, I think it's highly unlikely that they will be able to convince a court that they suffered $100M+ in damages due to the PAC defections.
"To be clear, there is a 100% chance that this will settle long before it gets to that point. Neither side wants to let this go to a judge, much less a jury, because the outcome is too unpredictable. But I don't think the MWC's hand is anywhere near as strong as you think it is.
"From my point of view, if they get 50% of the liquidated damages in these contracts, it will be a major victory. There is a reason that teams basically always pay only a fraction of the contracted exit fees when they switch conferences. Liquidated damages are simply too hard to enforce.
"And that is why conferences have been moving to grants of rights in recent years. Unlike liquidated damages, a GOR is almost certainly enforceable, since it ties the penalty for leaving to actual damages that the conference suffered."
Does this make sense to you? Found it on another site.
"The exit fees and poaching fees that the PAC is supposed to pay to the MWC are known as "liquidated damages" in the contracts world. (Basically, it means that you agree to pay a fixed amount if you breach a contract.) And they are notoriously difficult to enforce.
"Courts usually frown on liquidated damages. They prefer that the aggrieved party prove that they actually suffered X amount in damages as a result of the breach and then sue for X dollars. Case law says that for liquidated damages to be enforceable, they have to be a realistic estimate of the actual damages that the aggrieved party suffered as a result of the breach and not simply a punishment for breaching the contract.
"And given that the MWC is likely to survive as a viable conference, I think it's highly unlikely that they will be able to convince a court that they suffered $100M+ in damages due to the PAC defections.
"To be clear, there is a 100% chance that this will settle long before it gets to that point. Neither side wants to let this go to a judge, much less a jury, because the outcome is too unpredictable. But I don't think the MWC's hand is anywhere near as strong as you think it is.
"From my point of view, if they get 50% of the liquidated damages in these contracts, it will be a major victory. There is a reason that teams basically always pay only a fraction of the contracted exit fees when they switch conferences. Liquidated damages are simply too hard to enforce.
"And that is why conferences have been moving to grants of rights in recent years. Unlike liquidated damages, a GOR is almost certainly enforceable, since it ties the penalty for leaving to actual damages that the conference suffered."
