In 2006, the musical artist Prince (full name Prince Rogers Nelson) released a new album titled 3121. He also designed a 3121 eau de parfum to be launched by the Revelations Perfume and Cosmetics company. As part of the agreement between Prince and Revelations, Prince agreed to use his name, likeness, and new album to help market the perfume.
In November of 2008, Revelations filed suit against Prince in the New York State Supreme Court in Manhattan alleging breach of contract. Specifically, the perfume company claimed that the singer's agreement to promote the perfume was fraudulent and that he therefore fraudulently induced the company into the contract. According to testimony, Revelations based its decision to design and create the 3121 perfume on the representations and promises of Prince to promote the product. An expert also testified regarding the importance of a celebrity's promotion of their own perfume for the perfume's success.
Prince's Breach of Contract
Prince first refused to give any interviews at the perfume's launch party and also refused to provide any photographs for new releases or marketing materials. He continued to send mixed messages regarding his willingness to promote the perfume as the product was developed. His agents consistently assured Revelations of Prince's commitment to promoting the perfume. However, in January of 2007, the singer stated he did not want his name anywhere on the box or the product itself. Prince had promised to promote the fragrance on both the Oprah Winfrey Show and throughout the course of his 3121 concert tour. However, he never appeared on Oprah and he ultimately canceled his tour. Based on the constant assurances that Prince would cooperate, Revelations continued to develop the fragrance and never stopped trying to get Prince involved in the product's sales effort.
Revelations sought out-of-pocket damages, lost profit damages, and punitive damages. On January 18, 2011, the New York court ordered that Prince pay $3,948,798 to the perfume company for out-of-pocket losses. The court denied any award of lost profit or punitive damages, finding that Prince did not act with malicious intent. Prince initially filed an appeal, however Bloomberg news reports that the parties settled out of court and have withdrawn the case. All parties declined to disclose the terms of the settlement agreement.
When thinking about major business contracts, people often only think of agreements between two different companies. However, companies often contract with individuals for various reasons. As demonstrated by the $3.95 million in damages initially awarded in the above discussed case, an individual has the power to cost a company large amounts of money if he or she breaches a contract. Contract litigation can take years (this case was filed in 2008 and decided in lower court in January 2011) and cost your company a lot of money if you do not prevail in the lawsuit.
Whether in trial or settlement proceedings, it is highly important that you have an experienced and dedicated business contracts attorney representing you to ensure you receive the damages you deserve. If you believe you have a contract dispute, do not hesitate to contac our office today.