155 replies to this topic

[Rene]

Vodafone is being sued for $225m by the Jordan Formula One team, which is claiming that the mobile phone company reneged on a deal to sponsor the team. Jordan is claiming that Vodafone agreed to fund the team and then walked away from the deal when an arrangement with Ferrari was offered. The case will be heard in the next few days. The talks with Jordan took place at the start of last year.

Vodafone says the claim is "wholly without merit"

It is understood that the case is one reason why there have been problems with the F1 "fighting fund" as payments to Jordan are being blocked because of the legal action.

Source

This certainly sheds some light on the lack of a fighting fund, especially given the off-season remarks from the teams.

Apart from a signed agreement with Vodafone, what other legal leg could Jordan have to stand on?

Its surprising how many sponsors are first courted by smaller teams, before finding their way to one of the big teams...

[KenC]

Originally posted by Rene

Source

This certainly sheds some light on the lack of a fighting fund, especially given the off-season remarks from the teams.

Apart from a signed agreement with Vodafone, what other legal leg could Jordan have to stand on?

Its surprising how many sponsors are first courted by smaller teams, before finding their way to one of the big teams...

A question: the article notes the amount in dispute is $225m. In the US, millions are usually indicated by two "m"s, or one capitol "M", not one small "m". This was something I always needed to clarify when dealing with my UK counterparts. So, in this case, what do you think, is this millions or something else? It hardly seems possible that Vodafone would offer to sponsor Jordan to the tune of $225 million, unless it was for 7 years or so.

I imagine without a signed contract, Jordan has very little to stand upon, but perhaps, they hope that Vodafone settles out of court for a 'go-away' fee of several million.

As for why it seems that sponsors go from small to large teams, it seems to me, that small teams are more desperate, and do more searching in order to turn up new sources of funding. When these sponsors do their due diligence, they may find that their funds are better spent on a team like Ferrari than a Jordan.

And, it would seem to put Jordan at odds with Ferrari!

[Ross Stonefeld]

Weird. I thought we'd have heard the rumours of this a while ago if there was any deal going on. Also Vodafone with their sponsorships are partial to the color red and champions of the division (they were looking at the Audi le mans effort)

[Lada Lover]

Some clarification of British numbers would be welcome. Am I right to think that a billion in Britain is 100 million? Here a billion is a thousand million. M stands for meters and mm stands for millimeters

[Jodum]

Regardless of whether they use mm or m, what else could "$225m" mean?

If Jordan can produce proof that Vodafone made a deal with them I dont see why Jordan wouldnt win, If so it will only prove that the European Court system is ******** (not meant as a bash or anything, but that would be the only possible conclusion).

If I were I ran vodafone and we fealt Jordan had no basis to sue us I would humiliate Jordan in court, and then counter sue and put them out of business. I dont like whiney brats that try to pretend to be business men.

[calibre001]

grandprix.com is a US website, so a wild guess would be that they are talking $US. What other types of $ do you think they could be referring to? Maybe its Fijian dollars. Wait, no, they use mi to indicate millions, so it can't be Fijian dollars.

The mystery continues

[skinnylizard]

christ i have never heard this before. i thought and still think 225m is 225 million $ US. if not my whole life has been a lie.
i dont think Jordan will get anything out of it. coz stuff like this is pretty standard. just be more money lost on legal fees for Jordan. they have dug their own grave..
xxx
www.pi-media.com
www.eranstudio.com

[jloehs777]

Lawsuits like this probably discourage potential sponsers from having dealings with Jordan, I hope Eddie knows what he's doing :

[Gemini]

Originally posted by jloehs777
Lawsuits like this probably discourage potential sponsers from having dealings with Jordan, I hope Eddie knows what he's doing :

well said

[KenC]

Originally posted by Evan Shift
grandprix.com is a US website, so a wild guess would be that they are talking $US. What other types of $ do you think they could be referring to? Maybe its Fijian dollars. Wait, no, they use mi to indicate millions, so it can't be Fijian dollars.

The mystery continues

They sourced the story from the Times or something, so one can't assume that since the website is US-based they will be using US nomenclature.

[KenC]

Originally posted by Jodum
Regardless of whether they use mm or m, what else could "$225m" mean?

If Jordan can produce proof that Vodafone made a deal with them I dont see why Jordan wouldnt win, If so it will only prove that the European Court system is ******** (not meant as a bash or anything, but that would be the only possible conclusion).

If I were I ran vodafone and we fealt Jordan had no basis to sue us I would humiliate Jordan in court, and then counter sue and put them out of business. I dont like whiney brats that try to pretend to be business men.

Uhm, as Ladalover notes, since a Billion in the UK means $100million in the US, there's always a possibility that someone misplaced a decimal by one order. I'd be much more inclined to believe the lawsuit was for $22.5million, as this seems more in line with the one-year value of title sponsorship at Jordan. Then again, my understanding is that one can sue only for the differential value. That is, Jordan could sue for the difference between what was proposed and what they actually raised from their title sponsors last year. All the more reason to believe the figure is closer to $22.5million than $225million. Does anyone in their right mind, believe Vodafone had a verbal agreement to sponsor Jordan for $225million? It's bordering on the nonsensical. Jordan's greatest marketability is in the UK, and Vodafone already has tremendous exposure with Man United, why do a redundant deal?

[Riker!]

Id laugh if vodafone won and sued Jordans arse to the stone age.

[mikedeering]

Originally posted by KenC

Uhm, as Ladalover notes, since a Billion in the UK means $100million in the US, there's always a possibility that someone misplaced a decimal by one order. I'd be much more inclined to believe the lawsuit was for $22.5million, as this seems more in line with the one-year value of title sponsorship at Jordan. Then again, my understanding is that one can sue only for the differential value. That is, Jordan could sue for the difference between what was proposed and what they actually raised from their title sponsors last year. All the more reason to believe the figure is closer to $22.5million than $225million. Does anyone in their right mind, believe Vodafone had a verbal agreement to sponsor Jordan for $225million? It's bordering on the nonsensical. Jordan's greatest marketability is in the UK, and Vodafone already has tremendous exposure with Man United, why do a redundant deal?

A UK billion is a actually a million million. A US billion is a thousand million. The US standard is typically followed nowadays, even in the UK.

The $22.5m seems more realistic to me than $225m.

As for Vodafone's presence in F1 - I think that is all about obtaining a global presence. Vodafone in recent years has gone on an acquisition spree, buying up smaller telco players in emerging markets and relaunching them under the Vodafone banner. I understood the point of sponsoring F1 was to raise brand awareness on a global scale. The Man Utd sponsorship is aimed more at maintaining their UK market leadership in the face of a massive advertising campaign by O2, the BT/Cellnet brand in the UK. Of course, be sponsoring Man Utd Vodafone could also exploit that link on a global level too, specificially in Asia where Man Utd have a substantial following.

I recall reports that Vodafone were involved in discussions with Jordan about becoming a title sponsor (presumably Jordan would then become red rather than yellow) but then Ferrari became involved instead. Opting for Ferrari seems more in line with Vodafone's marketing strategy - the majority of their sports sponsorships seem to involve sponsoring the top dogs in a particular sport (e.g. Man Utd, Australian Rugby Union, Ferrari and...er English Cricket!).

[Deeq]

Originally posted by mikedeering


A UK billion is a actually a million million. A US billion is a thousand million. The US standard is typically followed nowadays, even in the UK.

The $22.5m seems more realistic to me than $225m.

As for Vodafone's presence in F1 - I think that is all about obtaining a global presence. Vodafone in recent years has gone on an acquisition spree, buying up smaller telco players in emerging markets and relaunching them under the Vodafone banner. I understood the point of sponsoring F1 was to raise brand awareness on a global scale. The Man Utd sponsorship is aimed more at maintaining their UK market leadership in the face of a massive advertising campaign by O2, the BT/Cellnet brand in the UK. Of course, be sponsoring Man Utd Vodafone could also exploit that link on a global level too, specificially in Asia where Man Utd have a substantial following.

I recall reports that Vodafone were involved in discussions with Jordan about becoming a title sponsor (presumably Jordan would then become red rather than yellow) but then Ferrari became involved instead. Opting for Ferrari seems more in line with Vodafone's marketing strategy - the majority of their sports sponsorships seem to involve sponsoring the top dogs in a particular sport (e.g. Man Utd, Australian Rugby Union, Ferrari and...er English Cricket!).

Thanks Mikedeering. I actually was woried that I may have been under dellusion about since grade 9, in regard of those super numbers. Mind you here in Sweden we have two different words for billion, One for UK-billion called Billion(10^12) and one for US-billion called Miliard(10^9).

As $225m Vs $22.5m, I agree it is more likely the later unless Vodafone's Company leadership are ....which is posible but unlikely.

BTW metre/meter is donated always "m" and not capital "M", millimeter is also "mm" never "Mm" which is Megameters.

[mikedeering]

Well Atlas News has the number at $250m!

[Slick]

I've done a search of the net and can't find any mention of Jordan working on a contract with Vodaphone.

Can anyone remember when the deal was done with Ferrari to help narrow down the search.

[kos]

the deal was anounced at 2001 Monaco GP

[Dead Sexy]

Just another Jordan/Minardi - esque stunt. I hope Vodafone counter for defamation of reputation and Jordan is forced out of F1. I'd rather see 9 teams without Jordan than 10 teams with Jordan.

[FredF1]

Originally posted by kos
the deal was anounced at 2001 Monaco GP

Took Eddie Jordan 2 years to notice there were no Vodafone logos on his cars then?

[VAR1016]

Originally posted by Lada Lover
Some clarification of British numbers would be welcome. Am I right to think that a billion in Britain is 100 million? Here a billion is a thousand million. M stands for meters and mm stands for millimeters

Coventionally, a "Billion" in England is now 1,000,000,000. This of course is the same as in the U.S.A.

It is of course incorrect; a billion should be 1,000,000,000,000 as it is in mainland Europe.

We had a perfectly good word: "Milliard" for 1000 million; this word is still used in Europe

PdeRL

[paulb]

Originally posted by Dead Sexy
Just another Jordan/Minardi - esque stunt. I hope Vodafone counter for defamation of reputation and Jordan is forced out of F1. I'd rather see 9 teams without Jordan than 10 teams with Jordan.

Please. As cash strapped as Jordan is now, they would not waste money on a frivolous lawsuit.

[Robbie]

Originally posted by KenC

. All the more reason to believe the figure is closer to $22.5million than $225million. Does anyone in their right mind, believe Vodafone had a verbal agreement to sponsor Jordan for $225million? It's bordering on the nonsensical.

Probably a mistake, but lawyers know how to multiply, if nothing else:

*sued for the amount of sponsorship agreed
* sued for the amount not received
*sued for leaving Jordan GP in a position in which they could find no alternative sponsor at short notice
*sued for placing team at a disadvantage against rival (Ferrari)
*sued for damaging prestige of team by not carrying through on prestigious deal
*sued for the amount of work put in by JordanGP to securing the deal.

So a relatively small deal -- i.e. not title or main or partner sponsorship -- could easily be contrived into a 22.5 compensation claim.

[ensign14]

Until there are some court papers from which we can work, there is little point speculating. However some generic points are as follows:

1. if a deal was done in early 2001 to kick off in 2002, the parties could easily have been negotiating for a year to settle matters without going to Court;

2. a $225m figure could be loss of profit or opportunity - imagine if Vodafone promised to put in $100m and on that basis Jordan had agreed with JPM or Kimi or someone to drive for it. It could claim that it would have had a couple more wins, perhaps leading to bigger things. Jordan's loss will be $100m, less the sponsorship it got to replace Vodafone, but with a loss of profit added on to it. Unlikely, but possible;

3. Jordan will pitch for the highest possible figure to give it some negotiating leverage;

4. if there is no written contract it will be very difficult to prove;

5. if an oral agreement is pleaded there is no way that Vodafone could get the case kicked out. A Court would want to hear witnesses, and it can only do so at trial;

6. we have no idea whether this is going to be an English claim, or even if it will go to Court;

7. I would be very interested to see why EJ thought there was a deal in place it's usually cut and dried. Maybe there was a performance related clause or something? Finish in the top 5 this year and we'll sign the cheque?

[The First MH]

Originally posted by jloehs777
Lawsuits like this probably discourage potential sponsers from having dealings with Jordan, I hope Eddie knows what he's doing :

Well said. I think it is an act of desperation that Eddie finds himself going down this road. He should rather be channeling his energy in finding a decent sponsor than suing someone who, with hindsight, appears to have made the correct marketing decision.

Anyway, onto part of what Rene touched upon.

This certainly sheds some light on the lack of a fighting fund, especially given the off-season remarks from the teams.

This part confuses me slightly for I have no idea why this would effect the fighting fund at all? It makes no sense to me. It seems more like a private matter between Jordan and Vodafone. It has nothing to do with the profit sharing among the teams. So, how then does it effect the fighting fund in such a way as to delay it?

[Ross Stonefeld]

I would guess in the sense that if Jordan won against Vodafone, they wouldnt need the fighting fund anymore so why give them the money?

[Rene]

Originally posted by The First MH
This part confuses me slightly for I have no idea why this would effect the fighting fund at all? It makes no sense to me. It seems more like a private matter between Jordan and Vodafone. It has nothing to do with the profit sharing among the teams. So, how then does it effect the fighting fund in such a way as to delay it?

Ferrari may block any creation of a Fighting Fund while one of their major sponsors is held hostage by one of the two team which would benefit from the Fighting Fund. You can be sure that Vodafone will try to exert any and all pressure to make this case go away...

[The First MH]

Originally posted by Rene


Ferrari may block any creation of a Fighting Fund while one of their major sponsors is held hostage by one of the two team which would benefit from the Fighting Fund. You can be sure that Vodafone will try to exert any and all pressure to make this case go away...

I guess that makes sense. I will state though, that I can only see this as being one of the reasons for its delay, not the reason.

[AD]

The figure is 150 million pounds. So that's around 225 million US dollars and 200 million Euro, etc.

How do I know? I read it on Sunday in the Times.

[LuckyStrike1]

If you can't get sponsors to the team - sue potential sponsors for not being sponsors ....

Modern day F1 tactics

[AD]

[Megatron]

Originally posted by bertocchi
Think of all the sponsors who don't/haven't sponsored Jordan over time.

He could sue all of them for...'non-sponsorship.'
They could then contersue for...'non performance.'

Philip Morris International is quaking in their boots even as I type this.

Oh that 'plucky' EJ. It would be just like him to have a German based sponsor and right before their home Grand Prix, fire his German driver.

Oops...'done that.'

Well, there's always his 'factory' Ford deal to fall back on.

Oops...Honda is paying for his Cosworths.

Well, there's always the 'fighting fund' to fall back on...wherein the other teams pay him to compete against them...

Malboro did have the regular helmet/uniform decals in 1991 on the first Jordan, but I doubt Eddie could sue them.

I don't think he will get anything, he isn't the first to sue a sponsor for a prepared agreement and I have seen much worse done (where a sponsor honestly has took people for a ride) and it hasn't ended up in court.

[Mickey]

From Atlas F1 News: Jordan Launch Damages Claim Against Vodafone today.

It centres on four words that Jordan claims were spoken to him on the telephone in 2001 by Vodafone's global branding director David Haines: 'You've got the deal.'

My ignorance of legal proceedings makes me wonder how can there be a case based on just some words spoken over a telephone though.

Can anyone shed some light please?

[Witt]

Eddie Jordan is doing his best to scare away other potential new-to-F1 sponsors. Who'd want to deal with these teams in the future if they are going to sue them when they don't get the deal? I'm very suprised Bernie hasn't stepped in yet and told Eddie to back off.

Jordan's case sounds pretty shonky anyway. No legally signed contract, just a few words over the phone, maybe eddie thinks that the way bernie does business (he's renowned for his verbal agreements, yeah?) is the legal way.

The greater story to all this, is that it's becoming very clear that the budgets in F1 are no longer sustainable. Because they are just too high, the F1 players have turned on themselves in an effort to garner whatever money they can to stay alive. Maybe in 10 years Ferrari and Mclaren will be running 10 cars each?

[VAR1016]

Originally posted by Mickey
From Atlas F1 News: Jordan Launch Damages Claim Against Vodafone today.

My ignorance of legal proceedings makes me wonder how can there be a case based on just some words spoken over a telephone though.

Can anyone shed some light please?

In the words of Samuel Goldwyn: "A verbal contract isn't worth the paper it's written on."

PdeRL

[Rene]

I guess it depends on what the value of a verbal agreement has in English law...I think in North America, Jordan would not stand a chance. Anyone have any insights to the judicial system in England?

[Deeq]

Originally posted by Rene
I guess it depends on what the value of a verbal agreement has in English law...I think in North America, Jordan would not stand a chance. Anyone have any insights to the judicial system in England?

If I'm not mistaken badly it has the same value as a writen contract/agreement but and that is big but You have to prove it is so. BTW it is the same here in SWEDEN, that is legaly there is no diference between writen or verbaly agreed deal standing, however the profing bit is the dificult one.

[ensign14]

Technically, Goldwyn was not entirely incorrect, as a 'verbal' contract is one recorded in words (as opposed to conduct). Trouble is 'verbal' is seen as synonymous with 'oral'.

For a contract to be formed under English law you need 4 things:

1. offer;
2. acceptance;
3. consideration (something valuable to show that there is a contract rather than a gift);
4. intention to create legal relations (as above).

The dispute here will be about 1 and 2, because 4 is presumed where there are commercial companies and 3 includes a promise to fulfil the contractual obligations. 1 will be in dispute because things like adverts, prospectuses and articles being put on sale do not constitute offers - they are 'invitations to treat', i.e. an indication that someone can make an offer along the lines suggested.

So, if you are in a shop, technically you offer to buy something by handing it to the till attendant, and the shop accepts the contract to purchase by scanning it in. A till attendant has the authority of the shop to enter into the contract.

Or if you place an ad in Exchange and Mart, that is technically an invitation to treat - you are not bound to sell to the first chap who comes along. They will come along and make an offer which you can accept or refuse.

If Jordan and Vodafone thrashed out something in writing, it was sent to Vodafone, and the Vodafone chap said 'you've got the deal', then I would think there was a contract. Regardless of whether it was signed. The offer would be the last thing Jordan sent to Vodafone which was capable of being accepted.

Vodafone will presumably argue that:
1. the last thing Jordan signed was not an offer, but an invitation to treat;
2. if it was an offer, it could only be accepted in writing;
3. the person who said 'you've got the deal' did not have ostensible authority to bind Vodafone in a deal;
4. he never said it anyway (or not in a context that it could be treated as acceptance - e.g. 'if you satisfy us on painting the car red, you've got the deal').

And yes, you can have a contract concluded on a telephone, it happens a huge amount (I was involved in a case which went to the Court of Appeal when someone argued that the contract was concluded in writing and not on the telephone, they lost, ha ha).

It's just a job to prove it...

[Jodum]

Ugh, as each day passes my view on Eddie Jordan becomes more and more negative...

REading some of the news stories on Jordan's suit against Vodafone, I'm begining to beleive the man is not very intelligent. Since when were verbal contracts admissable in court?! Someone please school me on this issue. He is doing himself a HUGE disservice by taking Vodafone to court on this, Its going to cost him dearly in future sponsorships

[jake]

It's been a long slide for Eddie et al since those heady days of 1999. Sadly, Eddie is in over his head. He needs the likes of VW to buy him out ... Anybody for an Jordan-Audi partnership. Until something like that happens, Eddie will make more news off the track than on.

[AlanB]

Verbal contracts are admissabile in court, see the topic already on this:

http://www.atlasf1.c...&threadid=57858

[confucius]

I'm not a lawyer of course (I'm sure there's one around here that can clear this up) but I thought that as long as the intent to make it legally binding was there, verbal contracts are as good as written ones.

[Tantor]

It was two years ago, the Vodaphone said "you have got the deal". Maybe it is too late for EJ to recall this verbal contract.

[fifi]

Originally posted by Tantor
It was two years ago, the Vodaphone said "you have got the deal". Maybe it is too late for EJ to recall this verbal contract.

civil cases in the uk take a long til before they actually reach court,
so EJ hasnt taken this long, he prolly filed after vodafone went to ferrari and this is the case reaching court to be heard

[ensign14]

Originally posted by Tantor
It was two years ago, the Vodaphone said "you have got the deal". Maybe it is too late for EJ to recall this verbal contract.

Jordan would have 6 years after a breach of contract to issue a claim (then a further year to get it to Court). The breach would have been when the 1st payment was due and Vodafone did not make it. And an oral contract is binding - think about it; have you ever ordered something over the phone? That's an oral contract.

[KenC]

Originally posted by ensign14
Jordan would have 6 years after a breach of contract to issue a claim (then a further year to get it to Court). The breach would have been when the 1st payment was due and Vodafone did not make it. And an oral contract is binding - think about it; have you ever ordered something over the phone? That's an oral contract.

Two things, one, does this " conversation" need witnesses, as a he-said, she-said case doesn't usually do very well in court. And, two, doesn't "consideration" actually have to change hands to show that Jordan's good faith was breached? The reason being, I had a vague recollection from the Newey case, that a contract is not a contract until the period in question comes to pass, and consideration is passed between the parties. This was the out that let Adrian renege.

[ensign14]

Originally posted by KenC

Two things, one, does this " conversation" need witnesses, as a he-said, she-said case doesn't usually do very well in court. And, two, doesn't "consideration" actually have to change hands to show that Jordan's good faith was breached?

1. Witnesses will help, as you say if it is one person's word against another it is very difficult for a Court to decide (and the burden of proof is on the Claimant). However, if (say) EJ took a note at the time and confirmed the discussion in writing to Vodafone, and Vodafone never wrote back to say 'you're wrong', a Court would MUCH more inclined to believe that EJ's recording is correct.

It appears from reports today that Ian Phillips witnessed the conversation and like a good ex-journalist wrote it down there and then in a notebook. So there is a contemporaneous note to back up an assertion that the words were said.

Vodafone is asserting that the director who said those words did not have Vodafone's authority to enter into a contract. If that was communicated to Jordan, or it was obvious (e.g. Vodafone had said to EJ that a deal could only be done by someone very very senior indeed), that would mean no contract was concluded.

It is also asserting that both parties knew there were terms to be agreed. This is not fatal to any claim (common law will 'invent' terms necessary, based on what is considered reasonable) but does not help.

2. Consideration will be easy to find - Jordan's consideration would be not seeking alternative sponsors for a short period and Vodafone's will be making the promise. Consideration can include a promise to pay money in future.

[Slick]

You don't go to court with a case you know is not true unless you are a complete idiot. I would say by the fact that this case has reached the high court that there must be some truth in the story. Whether the claim in successful or not depends on the court, but to say this is a frivalous claim seems a little pre-judgemental.

[kwood24]

Originally posted by Slick
You don't go to court with a case you know is not true unless you are a complete idiot. I would say by the fact that this case has reached the high court that there must be some truth in the story. Whether the claim in successful or not depends on the court, but to say this is a frivalous claim seems a little pre-judgemental.

EJ is a pretty smart and savvy business man (except the entire frentzen saga), as Slick says it is rare for the High Court to listen to cases that gets thrown out after two days. It is highgly unlikely thet jordan will win, but if you can sue macdonalds for getting fat and win you never know.

Thanks for the Legal advice ensign14, i will know who to contact next time im in trouble ;)

[KenC]

Originally posted by ensign14
2. Consideration will be easy to find - Jordan's consideration would be not seeking alternative sponsors for a short period and Vodafone's will be making the promise. Consideration can include a promise to pay money in future.

Thanks for the response, which leads me to another question: Isn't Jordan limited to material harm? That is, the difference between what the Vodafone deal purported to be, and what Jordan actually got from their main sponsor? Are there punitive damages involved in Jordan's figure? And is there a punitive damage cap in the UK?

[Ghostrider]

Originally posted by KenC
Thanks for the response, which leads me to another question: Isn't Jordan limited to material harm? That is, the difference between what the Vodafone deal purported to be, and what Jordan actually got from their main sponsor? Are there punitive damages involved in Jordan's figure? And is there a punitive damage cap in the UK?

Something I wondered about myself. It must become a claim of the difference or something like that. I doubt they will get 1 $ actually.