UCLA (University of California Los Angeles) calls it breach of contract. Under Armour calls it response to an act of God.
The two entities had an agreement. They had struck a 15-year-deal worth $280 million—the highest contract in college athletics. But just four years in, Under Armour says it’s pulling the plug. The reason: unforeseen effects of the coronavirus pandemic.
Under Armour paid UCLA $11 million per year in rights and marketing fees. It also contributed $2 million annually to improve university facilities. The company promised to supply $6.85 million in athletic apparel, footwear, and uniforms.
UCLA is a large school with a vast sports-fan following. In the deal, Under Armour expected vast exposure: its brand broadcast across many university sports to diverse crowds watching and attending the events. But when public gatherings and many sports seasons ground to a halt to try to limit virus spread, Under Armour lost the lion’s share of the exposure it was counting on.
Rather than continue with little hope of recouping its investment, Under Armour sought to break the agreement. The company cited a legal condition called “force majeure.” (Pronounced muh-ZHUR.) Force majeure is a rarely used clause that says sometimes unforeseen events beyond the control of the two parties may alter or even end an agreement.
Merriam-Webster dictionary says the phrase refers to “an act of God.” (The French term literally translates “superior force.”) In a way, claiming force majeure is like asking the other party to extend forgiveness of a debt or requirement because meeting the terms will now harm the first party.
Breaking a contract is tricky business. It can also be unethical. God emphasizes the importance of keeping one’s word when making pledges, commitments, and contracts. (See Numbers 30.) But He also encourages dealing graciously with one another. Forgiving debt is an option even in business. (See Matthew 18: 23-35.) Business transactions can reflect God’s purposes. See Paul’s example of Christ’s love for His people in Colossians 2:14. He says Jesus canceled “the record of debt that stood against us with its legal demands. This He set aside, nailing it to the cross.”
Jesus knew we could never pay our debt to Him. He took the cost Himself. Under Armour claims the cost of this contract is too large for it to bear.
But UCLA argues that the company is being “opportunistic.” The university says the apparel company is “using the global pandemic to try to walk away from a binding agreement it made in 2016 but no longer likes.”
The university defends its position, saying, “UCLA has met the terms of the agreement, which does not require that games in any sport be played on a particular schedule.” It is suing Under Armour to uphold its end of the deal, no matter what.
Meanwhile, Under Armour contends that it “continued to deliver athletic products for the 2020-2021 school year because we support athletes, even as it remains uncertain when sports will resume.”