Facts

In May 2016, UCLA Athletics and Under Armour entered into a 15-year exclusive apparel agreement for $280 million, the largest college sponsorship deal in the history of American college sports. Under the agreement, Under Armour was to exclusively design and supply apparel, footwear, and equipment for UCLA's 25 men's and women's sports teams starting in July 2017. In June 2020, Under Armour informed UCLA that it would be discontinuing its partnership with the school. At the time it terminated the contract, Under Armour had already paid UCLA $67 million in cash and product, leaving $213 million of value remaining on the contract. In August 2020, UCLA filed a lawsuit against Under Armour in California state court, alleging breach of the implied covenant of good faith and fair dealing, breach of contract, and promissory estoppel. UCLA later added claims for fraud and misrepresentation based on Under Armour's statements about its financial condition. After the alleged breach, UCLA covered up the Under Armour logo on all of their in-game jerseys with a "Stand Together" patch. UCLA entered into a new six-year deal with Jordan Brand and Nike for $46.45 million.

PLAINTIFF'S CONTENTIONS: Plaintiff contended that it at all times performed all material conditions, covenants, and promises in accordance with the terms of the binding agreement. Further, plaintiff argued that defendant had anticipatorily repudiated and actually breached its obligations under the agreement by failing to comply with its obligations and provide the desired products to UCLA within the contractual deadlines. Thus, plaintiff argued it was wrongfully deprived, impaired, and injured its enjoyment of the rights, benefits, and full value of the agreement. In response to defendant's contentions, plaintiff maintained that the contract's Force Majeure clause did not apply because nothing about COVID-19 made it impossible or impracticable for defendant to meet its obligations. Moreover, plaintiff alleged that it did not miss 50% or more of "scheduled" baseball games because all baseball games for the entire Pac-12 conference were taken off schedule due to COVID-19. Finally, plaintiff argued that it took appropriate action against the soccer coach involved in the "Operation Varsity Blues" scandal by putting the coach on leave the same day he was arrested and accepting his resignation several days later.

DEFENDANT'S CONTENTIONS: Defendant claimed that the pandemic and suspension of athletic events invoked the contract's Force Majeure clause and relieved both parties from liability under the agreement. Additionally, defendant argued that it was allowed to cancel the contract because one of the plaintiff's Core Teams, men's baseball, missed at least 50% of the scheduled games. Defendant also alleged that UCLA's failure to take appropriate action against a former UCLA soccer coach involved in the "Operation Varsity Blues" college admissions scandal allowed it to terminate the agreement.

Result

Under Armour agreed to pay $67,491,000 to settle the claims.