The Jacksonville Jaguars didn't have the best season. In addition to finishing last in the AFC South, drama off the field led to fans staging a “clown out,” by wearing rainbow wigs and painted faces to season finale. Faced with the prospect of being associated with the clown out, Roofclaim.com – one of the team's sponsors – filed a lawsuit against the Jaguars, seeking damages, an injunction to stop the team from using its trademarks, and rescission of the sponsorship agreement.
The parties entered into the sponsorship agreement on August 31, 2021. Although Roofclaim.com was concerned about the team's less-than-stellar record, they were allegedly persuaded to make the investment when the Jaguars hired Urban Meyer as its head coach. Meyer was fired after only 13 games. Roofclaim.com negotiated a provision allowing them to terminate the agreement if Meyer was no longer the head coach, but that provision doesn't kick in until the third contract year.
Roofclaim.com's lawsuit is based on the argument that the Jaguars breached the agreement by failing to “provide the sponsorship benefits outlined in the Agreement.” Although the Agreement includes a detailed list of benefits, the complaint doesn't specify which benefits weren't provided. Instead, Roofclaim.com argues in the alternative that even if the team did provide the benefits, the Jaguars “created such a toxic environment around its brand” that the sponsorship has now become a detriment to RoofClaim.com.
Unless Roofclaim.com can better articulate the nature of the breach, this lawsuit may just be a Hail Mary that is unlikely to lead to a victory. But while we wait to see if the Jaguars will have a better record in court than they did on the field, this case serves as a reminder that companies need to think carefully about their termination options before entering into a sponsorship. It's unlikely that either side will walk away with their wish list, but they should at least walk away with a realistic understanding of their options.
On the plus side, the Jaguars won their final game.
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