During the Spring of 1996, Appellant Kobe Bryant (Bryant), then a seventeen-year old star high school basketball

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During the Spring of 1996, Appellant Kobe Bryant (‘‘Bryant’’), then a seventeen-year old star high school basketball player, declared his intention to forego college and enter the 1996 lottery draft of the National Basketball Association. On May 8, 1996, The Score Board Inc. (‘‘Debtor’’), then a New Jersey based company in the business of licensing, manufacturing and distributing sports and entertainment-related memorabilia, contacted Bryant’s Agent, Arn Tellem (‘‘Tellem’’ or ‘‘Agent’’) in anticipation of making a deal with Bryant.

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   In early July 1996, after the above [initial] negotiations, Debtor prepared and forwarded a signed written licensing agreement (‘‘agreement’’) to Bryant. The agreement granted Debtor the right to produce licensed products, such as trading cards, with Bryant’s image. Bryant was obligated to make two personal appearances on behalf of Debtor and provide between a minimum of 15,000 and a maximum of 32,500 autographs. Bryant was to receive a $2.00 stipend for each autograph, after the first 7,500. Under the agreement, Bryant could receive a maximum of $75,000 for the autographs.

   In addition to being compensated for the autographs, Bryant was entitled to receive base compensation of $10,000. Moreover, Debtor agreed to pay Bryant $5,000, of the $10,000, within ten days following receipt of the fully executed agreement. Finally, Bryant was entitled to a $5,000 bonus if he returned the agreement within six weeks.

   Bryant rejected the above agreement, and on July 11, 1996, while still a minor, Bryant made a counter-offer (‘‘counter-offer’’), signed it and returned it to Debtor. The counter-offer made several changes to Debtor’s agreement, including the number of autographs. Bryant also changed the amount of prepaid autographs from 7,500 to 500.

   Balser claimed that he signed the counter-offer and placed it into his files. The copy signed by Debtor was subsequently misplaced, however, and has never been produced by Debtor during these proceedings. Rather, Debtor has produced a copy signed only by Bryant.

   On August 23, 1996, Bryant turned eighteen. Three days later, Bryant deposited a check for $10,000 into his account from Debtor.  

   On or about September 1, 1996, Bryant began performing his obligations under the agreement, including autograph signing sessions and public appearances. He subsequently performed his contractual duties for about a year and a half.

   By late 1997, Bryant grew reluctant to sign any more autographs under the agreement and his Agent came to the conclusion that a fully executed contract did not exist. By this time, Tellem became concerned with Debtor’s financial condition because it failed to make certain payments to several other players. Debtor claims that the true motivation for Bryant’s reluctance stems from his perception that he was becoming a ‘‘star’’ player, and that his autograph was ‘‘worth’’ more than $2.00.

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   On March 17, 1998, Debtor sent Bryant a check for $1,130 as compensation for unpaid autographs. Bryant alleges that he was entitled to $10,130, not $1,130. The Bankruptcy Court found that Bryant was owed $10,130 and the check for $1,130 was based on a miscalculation

   On March 18, 1998, Debtor filed a voluntary Chapter 11 bankruptcy petition. On March 23, 1998, Tellem returned the $1,130 check upon learning of Debtor’s financial trouble. Included with the check was a letter that questioned the validity of the agreement between Bryant and Debtor.

   * * * On April 20, 1998, Tellem stated that no contract existed because the counter-offer was never signed by Debtor and there was never a meeting of the minds. Tellem added that the counter-offer expired and that Kobe Bryant withdrew from the counter-offer.

   Subsequently, Debtor began to sell its assets, including numerous executory contracts with major athletes, including Bryant. Bryant argued that Debtor could not do this, because he believed that a contract never existed. In the alternative, if a contract was created, Bryant contended that it was voidable because it was entered into while he was a minor. * * *

   On December 21, 1998, the Honorable Gloria M. Burns ruled in her memorandum opinion that Debtor accepted Bryant’s counter-offer and, therefore, a valid contract existed between Bryant and Debtor. In the alternative, the Bankruptcy Court held that even if Bryant’s counter-offer was not signed by Debtor, the parties’ subsequent conduct demonstrated their acceptance of the contractual obligation by performance, thereby creating an enforceable contract. Judge Burns denied Bryant’s claims of mutual mistake, infancy and his motion for stay relief.

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   On February 2, 1999, the Bankruptcy Court entered its final orders: (1) granting Debtor’s motion to assume its executory contract with Bryant and assign it to Oxxford; and (2) overruling Bryant’s objection to the sale.

   Bryant challenges the Bankruptcy Court’s finding that he ratified the agreement upon attaining majority. Contracts made during minority are voidable at the minor’s election within a reasonable time after the minor attains the age of majority. [Citations]  

   The right to disaffirm a contract is subject to the infant’s conduct which, upon reaching the age of majority, may amount to ratification. [Citation.] ‘‘Any conduct on the part of the former infant which evidences his decision that the transaction shall not be impeached is sufficient for this purpose.’’ [Citation.]

   On August 23, 1996, Bryant reached the age of majority, approximately six weeks after the execution of the agreement. On August 26, 1996, Bryant deposited the $10,000 check sent to him from Debtor. Bryant also performed his contractual duties by signing autographs.

   The Bankruptcy Court did not presume ratification from inaction as Bryant asserts. It is clear that Bryant ratified the contract from the facts, because Bryant consciously performed his contractual duties.  

   Bryant asserts that he acted at the insistence of his Agent, who believed that he was obligated to perform by contract. Yet, neither Bryant nor his Agent disputed the existence of a contract until the March 23, 1998, letter by Tellem. That Bryant may have relied on his Agent is irrelevant to this Court’s inquiry and is proper evidence only in a suit against the Agent. To the contrary, by admitting that he acted because he was under the belief that a contract existed, Bryant confirms the existence of the contract. Moreover, it was Bryant who deposited the check, signed the autographs, and made personal appearances.

   For the above reasons, Bryant’s appeal of the Bankruptcy Court’s orders finding that a valid and enforceable contract exists is denied.

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Smith and Roberson Business Law

ISBN: 978-0538473637

15th Edition

Authors: Richard A. Mann, Barry S. Roberts

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