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Coach Jimbo Fisher’s Contract Extension Illustrates Basic Principle of Florida Contract Law

October 27, 2015

By: Justin C. Carlin

Those who know me even moderately well know that I am a huge Florida State football fan. So, I was obviously very pleased to learn that FSU’s contract with its preeminent coach, Jimbo Fisher, was extended for five years. Upon reading the contract extension, however, I was somewhat dismayed that the buyout for his early termination of the contract was “a mere” $5 million in 2016, $3 million between 2017 and 2018, and $1 million before 2019.

While buyouts in the low millions are properly considered “real money,” it’s conceivable that a competing university (or even an NFL team) could, at some juncture, pay the buyout money and lure Jimbo Fisher away from FSU.  If Jimbo Fisher is considered so valuable to FSU, and FSU is offering Jimbo such a high salary (in terms of pay, the contract places Jimbo in the top five of all college coaches), why wouldn’t FSU reqDollarphotoclub_59197294__1428628400_73.205.77.214uire that the buyout be higher?

Rather than any inability of FSU to convince Coach Fisher to accept a higher buyout, I surmise that the buyout was mostly the result of Florida law, which prohibits so-called “penalty clauses” in contracts.  Under Florida law,

parties to a contract may stipulate in advance to an amount to be paid or retained as liquidated damages in the event of a breach. The Florida Supreme Court has established a two-prong test to determine whether a liquidated damages provision will be stricken as a penalty clause. First, the damages consequent upon a breach must not be readily ascertainable. Second, the sum stipulated to be forfeited must not be so grossly disproportionate to any damages that might reasonably be expected to follow from a breach as to show that the parties could have intended only to induce full performance, rather than to liquidate their damages. READ MORE

U.S. Supreme Court Weighs In on Issue Raised in Mortgage Foreclosure Case

January 14, 2015

By: Justin C. Carlin

It’s not often that the United States Supreme Court issues an opinion that has an effect on Florida mortgage foreclosure cases, but that’s exactly what the Court did today when it issued its opinion is Jesinoski v. Countrywide Home Loans, Inc.  The case involved borrowers who rescinded their mortgage documents based on the lender’s failure to make certain disclosures under the federal Truth-in-Lending Act (“TILA”).  After making payments on the mortgage for nearly three years, the borrowers sent notice to the lender of their rescission of the agreement.  The issue in the case was whether the borrowers’ subsequent action for a declaratory judgment (by a court declaring the mortgage rescinded) was time-barred under TILA as having been brought more than four years after the execution of the mortgage.  The Supreme Court found that the action was not time-barred, because the borrowers complied with the applicable limitations agreement set forth in TILA by providing notice of their recession within three years from the execution of the loan documents.

Military Couple in Front of House and Foreclosure For Sale Real Estate Sign.The Jesinoski case is notable, but not just because of its holding.  First, the case illustrates the tremendous protection that TILA affords to Florida consumers. Under Florida law, a contract of any kind (whether a promissory note, a mortgage, or any other kind of contract) may usually not be rescinded after the parties have changed their positions as a result of the contract.  Under TILA, however, a consumer in Florida appears to have the ability to rescind the contract years after the contract is entered into. READ MORE

Law Student Loses Contract Lawsuit against Criminal Attorney

January 7, 2015

By: Justin C. Carlin

Applying Florida law, the Eleventh Circuit Court of Appeals recently issued a decision (Kolodziej v. Mason, — F.3d —, 2014 WL 7180962) involving a fundamental question of contract law on somewhat interesting facts.  A Texas criminal attorney (James Mason) handling a high-profile murder case asserted that it was impossible for his client to have committed certain murders in accordance with the prosecution’s suggested timeline.   Specifically, he argued that his client would have had to get off a flight in Atlanta and travel to a La Quinta Hotel (several miles away) in only 28 minutes.  Thus, Mason challenged the prosecution to prove that somebody could make that route and that he’d “pay them $1 million if they [could] do it.”  Mason’s remarks were later featured in a television program on NBC, as follows: “I challenge anybody to show me—I’ll pay them $1 million if they can’t do it.”

press conferenceA law student at the South Texas College of Law heard Mason’s (edited) remarks and interpreted the remarks as an offer to form a contract that could be accepted by performance.  The law student from Texas went to Georgia and actually recorded himself traveling the route from the airport to La Quinta in less than 28 minutes.  He then sent Mason a copy of the recording, along with the letter demanding payment of $1 million.  Mason refused payment, and the law student sued both Mason and his law firm in federal court, alleging breach of contract.  The trial court entered summary judgment in favor of Mason, and the law student appealed. READ MORE