Course Code: BSL605 Course Title: Legal Aspects of Business

Course Instructor: Dr. Abhishek Pandey
Academic Task No.: CA2 Academic Task Title: Case Study
Columbia Industries, Inc
Date of Allotment: 01-08-2020 Date of submission: 05-09-2020
Student’s Roll no: B47 Student’s Reg. No: 11910540

Learning Outcomes: With the help of this academic task, I learned about the concept of contract
(Breach of Contract) and able to understand rules of law and different sections of the Indian Contract
Act.

Declaration:

I declare that this Assignment is my work. I have not copied it from any other students work or
from any other source except where due acknowledgement is made explicitly in the text, nor has
any part been written for me by any other person.

Student’s Signature: Jyoti Pathak

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 BREACH OF CONTRACT

1. INTRODUCTION
“Breach of Contract” is a legal term that describes the violation of a contract or an agreement that
occurs when one party fails to fulfil its promises according to the provisions of the agreement.
Sometimes it involves interfering with the ability of another party to fulfil his duties. A contract
can be breached in whole or in part.
Breach of Contract is the most common reason contract disputes are brought to court for resolution.

A Breach of Contract suit must meet four requirements before it will be upheld by a court.
 The contract must be valid.
 The plaintiff or the party who’s suing for breach of contract must show that the defendant
did indeed breach the agreement’s terms.
 The plaintiff must have done everything required of them in the contract.
 The plaintiff must be notified the defendant of the breach proceeding with filing a lawsuit.

There are three types of Breach of Contract: -

a. Material: A material breach is one that is significant enough to excuse the aggrieved or
injured party from fulfilling their part of the contract.
b. Partial: A partial breach is not as significant and does not normally excuse the aggrieved
party from performing their duties.
c. Anticipatory: An anticipatory breach is one where plaintiff suspects that the offending
party might breach a contract by doing or falling to do something that shows their intention
not to complete their duties.
 CASE 1
Sachin Tendulkar Settles Lawsuit Against Australian Bat Manufacturing
Company Apologises

2. PARTIES OF THE CASE

There are two parties involved in this breach of contract
Party 1 (Plaintiff): Sachin Tendulkar who is considered as Plaintiff as he was one who bring
the case against Spartan in Federal court of Australia.
Party 2 (Defendant): Spartan, company that manufactures bat is considered as defendant
because it was sued in the court by the plaintiff.

3. ISSUE
Sachin Tendulkar, legendary Indian cricketer, has resolved a payment dispute case with the
Australian Federal Circuit Court against Spartans Sports Group, the bat manufacturing firm.
Back in June 2019, after being pushed into the legal way to recover his dues, the Master Blaster
had filed a US$ 2 million lawsuits against Spartan and its directors.

Sachin Tendulkar Settles Lawsuit Against Australian Bat Manufacturer After Company Apologises | Cricket News.
(n.d.)

In 2016, Sachin Tendulkar entered into a worldwide exclusive sponsorship agreement with
“Spartan”, which is an Australian bat manufacturing company to promote its sporting goods and
sportswear. Tendulkar alleged that Spartan failed to comply with its obligations under the
agreement by failing to pay him royalties and endorsement fees as per the agreement signed
by both the parties. Spartan had continued to use Tendulkar’s name and image even after the
termination of the agreement. Tendulkar provided his promotional services at various Spartan
events in both Mumbai and London.
Tendulkar, in the lawsuit a number of Spartan companies and their directors, Kunal Sharma
and Galbraith, alleged “breach of contract, misleading and deceptive conduct”
and sought injunctions, damages as well as cancellation of trade marks”.
Sachin decided to settle his lawsuit against bat-maker Spartan in the Federal Court of
Australia after the company apologised for “breach of contract”. Spartan apologises to Tendulkar
for its failure to honour his sponsorship agreement and is grateful for Tendulkar’s patience in
resolving this dispute.

4. RULES OF LAW-DETERMINATION OF SPECIFIC PROVISION AVAILABLE

The case is under breach of contract as Spartan had continued to use the Tendulkar’s name and
his imager even after the termination of the agreement.
It is said that when a breach of contract occurs or is alleged, one or both the parties may wish
to have the contract enforced on its terms or may recover for any financial harm caused by the
alleged breach. And if a dispute over a contract arises and informal attempts at resolution fail, the
most common next step is a lawsuit and here in the case mentioned above we can see that
Tendulkar had in the lawsuit against a number of Spartan companies and its directors, alleged
“breach of contract, misleading and deceptive conduct” and sought injunctions, damages as well
as cancellation of trademark.
Section 39 of the Indian Contract Act,1872 deals with the effect of the refusal of a party to
perform promise wholly. It states that when a party refuses or disables himself to avoid the
performances of the terms of the contract, then the other party can put such a contract to an end
unless specified otherwise in the contract. Such termination of a contract on the part of the party
that refused to perform their obligations, this is known as repudiation.
Section 37 of the Indian Contract Act, 1872 emphasizes the obligation of parties to contract.
This section lays down an obligation on the contracting parties to either perform or offer to perform
their respective set of promises. The performance of these obligations is excused when specified
to be so excused by the Contract Act or any other law.
5. ANALYSIS
Tendulkar had provided the company, his promotional services “Sachin by Spartan” line of
products and he was unable to pursue other sponsorship opportunities for sporting goods and
sportswear while the Spartan agreement was in place.
As per the Breach of Contract the company had used the name of Tendulkar and his image
even after the termination of the agreement made between the company and Tendulkar. The
company used his trademark where Tendulkar was playing his square cut style.
Tendulkar alleged that the Spartan company had failed to comply with its obligations under
the agreement by failing to pay him royalties and endorsement fees as per the agreement signed
by both the parties. This shows that the company is sued by him under “breach of contract”.

The company apologised to Tendulkar for his failure and grateful to him for his patience in
resolving the disputes.
Since a contract is legally binding according o the Indian Contract Act, 1872, it follows that
where there is breach of contract, there is a violation of legal duty. In such a violation, one party
refuses to fulfil the contract and other has to terminate it. A breach of contract can be wholly or
partly. The party who breaches the contract must give compensation only for the part he has not
performed.

6. CONCLUSION
The case is under breach of contract as breach of contract occurs when one party to the
agreement fails to fulfil an obligation or breaks the “Term and Condition” as set out in that
agreement.
We can see that Tendulkar has filed a civil lawsuit against an Australian bat manufacturer to
recover unpaid dues of 2 million Australian dollars. The bat company had promised him at least 1
million Australian Dollar a year to use his name and image to promote their products across the
globe.
So, this was the agreement that was made between the two parties but the company Spartan
failed to comply with its obligations. The company failed to pay him the royalties and endorsement
fees as per the agreement signed by both the parties.
This breach of contract can be considered as actual breach of contract as one party has refuse
to perform his part of the obligations by the due date.
 The party who suffers the loss can claims damages by filing suit before the court under Section
9 of the Code of Civil Procedure, 1908. Here Tendulkar suffers the loss and according to this law
he filed case against the company.
A contract is an essential part of transactions. It would be rendered useless in the absence of
legal provisions for its enforcement. Breach of contract is a common phenomenon and is mainly
four types. It leaves one party aggrieved due to action or inaction on the part of the other party on
the contract. The rights and interests of the parties aggrieved by a breach of contract are well
protected under Indian Contract Act and similar laws. Chapter 6 of this Act deals with the
consequences of a breach of contract.

7. References
1. Sachin Tendulkar Settles Lawsuit Against Australian Bat Manufacturer After Company
Apologises | Cricket News. (n.d.). Retrieved September 5, 2020, from
https://sports.ndtv.com/cricket/sachin-tendulkar-settles-lawsuit-against-australian-bat-
manufacturer-after-company-apologises-2228846
 CASE 2
WeWork sues SoftBank for breach of contract over the termination of its $3
billion tender offer

1. PARTIES OF THE CASE

There are two parties involved in this breach of contract
Party 1 (Plaintiff): The co-founder of WeWork Adam Neumann who is considered to be as
plaintiff as he filed lawsuit.
Party 2 (Defendant): SoftBank Group and Soft Bank Vision Fund are defendants.

2. ISSUE
WeWork, an American commercial real estate company that provides shared workspaces for
technology start-ups and services for other enterprises filed a lawsuit against Japan’s SoftBank
Group and its vision fund for terminating $3 billion tender offer to the office sharing start-up’s
shareholders.
The tender offer was part of a $9.6 billion rescue financing package that Soft Bank agreed with
WeWork in October, 2019 and gave it control of the company. Since, then the WeWork occupancy
rates have fallen due to Covid -19 pandemic.

 
WeWork sues SoftBank for breach of contract over the termination of its $3 billion tender offer - The Hindu
BusinessLine. (n.d.).
 SoftBank said it would not press ahead with the tender offer because several pre-conditions
had not been met which frustrated WeWork minority shareholders as they were expecting a pay-
out.
The brazing comment of Soft Bank and Soft Bank Vision Fund have prompted legal action by
a special committee of WeWork’s board and the lawsuit was filed in a Delaware Court. They filed
a lawsuit, calling SoftBank’s decision to terminate the tender offer wrongful.
Meanwhile, Soft Bank’s Chief Legal Officer “Rob Townsend” called WeWork claims
meritless. He said that the bank had no obligations to complete the tender offer.

3. RULE OF LAW DETERMINATION OF SPECIFIC PROVISION APPLICABLE

According to the case SoftBank, Japanese conglomerate that has invested in many fast growing
but unprofitable start-ups, included the stock offer in a bailout that saved WeWork from financial
collapse in 2019. The director of the company lawsuit, filed, contends that SoftBank and one of its
investment funds” reneged on their promise to pay for the benefits they already received’ when
they withdraw the offer in April,2020.
So, when either of the parties does not keep their end of the agreement or does not fulfil their
obligations as per the terms of the contract, it is a breach of contract.
Section 37 of the Indian Contract Act, 1872 emphasizes the obligation of parties to contract.
This section lays down an obligation on the contracting parties to either perform or offer to perform
their respective set of promises. The performance of these obligations is excused when specified
to be so excused by the Contract Act or any other law.
Section 39 of the Indian Contract Act, 1872 deals with the effect of the refusal of a party to
perform wholly. It states that when a party refuses or disables himself to avoid the performance of
the term of the contract, then the other party can put such a contract to an end unless specified
otherwise in the contract. Such termination of a contract would amount to a breach of contract on
the part of the party that refuse to perform their obligations.
Section 73 of Indian Contract Act,1872 provides that “when a contract has been broken, the
party who suffers by such breach is entitled to receive, from the party who has broken the contract,
compensation for any loss or damage caused to him thereby, which naturally arose in the usual
course of things from such breach, or which the parties knew, when they made the contract, to be
likely to result from the breach of it.
4. ANALYSIS
The case is related to “termination of the contract” where a company WeWork has sued
SoftBank for breach of contract after Soft Bank had terminated the tender offer to purchase $3
billion worth of shares from the real estate firm.
To terminate a contract means to end the contract prior to it being fully performed by the party
which indicates that Soft Bank had ended his agreement made with WeWork to purchase the share
prior to the performing all of their respective obligations required by the contract.
It is a wrongful termination as in this a party terminates the contract without having
justification either under general principles of contract law or under the term of the contract. Here
in the case Soft Bank had terminate the offer without any proper justification.

5. CONCLUSION
Termination of a contract takes pace when the parties to the contract are released from their
contractual obligations. Contract termination may take in a number of ways and this case it has
taken under breach of contract which says that any of the parties fails or refuses to perform its
promise under the contract. A breach of contract takes place when a party fails to deliver on their
contractual promises by failing to perform their obligations completely.
The case is considered to be an anticipatory breach of contract which takes place where a
party evidences an intention (either expressly or impliedly) that they no longer consider themselves
bound by the contract.
From the above case it is clear that Soft Bank has terminated its $3 billion tender offer and for
this WeWork sued it for breach of contract.
Contract termination is a drastic step and should be avoided, if possible. However, there are
times when termination is appropriate, such as when the terms of the contract or the law allow for
termination and it would also be the best way to mitigate damages. Under these circumstances, the
contract should be terminated with caution and with good legal advice.

6. References
1. WeWork sues SoftBank for breach of contract over the termination of its $3 billion tender offer
- The Hindu BusinessLine. (n.d.). Retrieved September 5, 2020, from
https://www.thehindubusinessline.com/news/world/wework-sues-softbank-for-breach-of-
contract-over-the-termination-of-its-3-billion-tender-offer/article31288236.ece