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FACT-The Federation Internationale de L’Automobile (FIA) had a Formula One races event held in the U.S. Two cars' rear tires blew out on the same curve during the test runs before the race at the Indy Speedway, which is not normal. Michelin agreed with IFA that their tires were defective. It ruled out 14 form participating in that race because they were all using Michelin tires, and it was not possible to change to different tires before the race started since the race was about to start. This accident left only six teams with eligibility to compete in the race; the teams were using Bridgestone tires. Some fans sued FIA for breach of contract, and they wanted FIA for a refund of their ticket, also the cost of travel and other expenses that they incurred during the race. Plaintiffs contended that the advertisement promised a race involving twenty cars; not six and they stopped the defendants from offering less. The trial court consolidated and dismissed the suits.
Court Decision/ Holding- For the foregoing reasons, 7th circuit affirm the judgment of the district court.
DID IMS BREACH A CONTRACTUAL OBLIGATION TO THE RACE WHEN THERE WERE ONLY SIX CARS THAT DROVE?
The claim argued that IMS did not breach the ticket contract. For the Indiana case, which mentioning the nature of a contract with the sale of an admission ticket, IMS did not make a contract with the plaintiffs providing them to be spectacle, but just let them go in and see the event. According to the ticket agreements, when a fan bought a ticket to the event, that ticket does not operate to confer on the license, any title or interest in the property (Black's law dictionary,2004). Moreover, IMS could change anything in the event without a contractual right in order to make sure that it was not put to a bad reputation and its business damaged if they already knew there are some problems with the tires. Nevertheless, plaintiffs mentioned that F1 racing regulations did poorly in 2005 with only less than eleven racers. Six cars racing may have less intriguing or exciting movement than twelve cars would, but the court mentioned that this is not against the rules. In addition, under the F1 regulation rule 17, F1 can deprive or cancel any race which fewer than twelve cars show up on a competition race.
The plaintiffs put up a statement and argued that "even if there was enough reason to cancel the race, the contract required the defendants to use ‘reasonable efforts’ to avoid cancelling it and that all participating teams should have put more effort to ensure they put up a good race." Considering that every competitive sport assumes that all the players will try their best to get to win, it can not blame on the players because of their poor performance. The court gave an example of how a team can not sue for a loss because one of their team players was dogging the competition. The court decided the ticket of the contract must be dismissed.
DID IMS BREACH THE OTHER CONTRACT AND USE THIRD PARTY BENEFICIARIES TO EXTEND THE CONTRACTS?
The plaintiffs brought up 3 issues to the court for suing IMA. The first one is the proper operation of the race; the second is the application of the rules of defendants and the international sporting code and lastly Michelin's obligation to provide suitable, safe tires for Formula One automotive as they entered the race. As the court mentioned before, the tire obligation does not allege a violation. The plaintiffs argued the first and second issues. They mentioned that those two contracts in Concorde and FIA commercial agreement gave them right to make sure that the defendants use their best ability; to ensure that there will be at least sixteen cars’ race in every single Formula One event instead of six cars’ race. The court said that it is weird that IMA could give their fans the legal right to interfere with their business relationships, but concluded that this will not make a Rule 12-which denied from the 7th circus dismissal although it is in the contract: the plaintiffs do not grant any such right to IMA private business.
There is one provision saying that all teams have to try their best to get together and get additional cars into races in which less than twenty cars are entered. The word "entry" did not mean registering to a race, so the plaintiffs do not have any right under the supply as third party beneficiaries. Moreover, under the Indiana law, "a contract grants non-party rights if only the intent to grant the rights affirmatively appears according to the language used in the instrument when interpreted and construed properly". The court affirmed the claim because the contract was not violated.
DID IMA NEED TO PAY PLAINTIFFS' EXPENSES IN TRAVELING TO SEE THE RACE?
The next claim is that the plaintiffs want IMA to pay for their damage for sitting to watch less that twenty cars drove on the event as promised. The plaintiffs argued that IMS violated the promissory estoppels-whose definition is a situation when one makes a promise to another with no enforceable contract between them. Also, the plaintiffs must prove that there was a promise, which the court mentioned it as an "advertising and promotion". According to Restatement of Contracts law § 90, in a promise the promisor should reasonably expect to perform the action on the side of the promisee. The court mentioned that plaintiffs were being unreasonable because fans should know that there were many cases that showed there would be many problems to stop a twenty cars race at a same day, just like driver's condition and a danger track condition will stop the race. Moreover, the court said that the plaintiffs were so naive that they took an advertisement as a promise and believed that there would be twenty cars on the race. The court must have dismissed the claim.
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DID IMS NEGLECT TO PRESENT THE RACE AS ADVERTISED AND PROMOTED?
The plaintiffs argued of IMA's negligence that led to no more than six cars racing on the field. According to the Negligence Act Of War law, "this act of God must have been unforeseeable." IMA did not violate negligence because the tires’ issue was unpredictable. Also, the race did not have any actual loss or damage incurred at the race. The court dismissed the claim.
MY OPINION- I AGREE WITH ALL OF THE COURT’S DECISION.
About the first claim, IMA has the final decision for all the changes without having to make notices to anyone. It should say that it clearly notified the fans about the rules and its terms on the ticket. By purchasing that ticket, people inherently accept all the rules written on the ticket. Also, IMA did not mean to reduce the number of racers down to six, but they had to do it due to the safety of the racers and fans. Concerning the second claim, I do not think plaintiffs have the right to interfere with the IMA's private business, although IMA was misled to put this rule into the Concorde agreement and the FIA commercial agreement. The plaintiffs must not have the right to interfere with someone's private business because they just bought their tickets and came along to watch the racing. I must agree the court affirmed the third claim. The plaintiffs tried to make IMA pay for all of their expenses for the trip to the race, which is a totally unreasonable request. I do agree with the plaintiffs’ request for their tickets’ refund but not all of their expenses. What if someone bought a Rolex during the race, will it be counted as a plaintiffs’ expense? The fourth claim may feel reasonable, in my opinion, but plaintiffs actually tried to be smart and avoid the theory and straight claim that IMA should refund them because of the negligence. In my opinion, it was not IMA's fault because no one wanted the tires defective. I think the court did a marvelous job by holding off the case because those claims are unreasonable. Also, it will be a good example to fans that they can sue their favorite sport clubs if there were any accidents that happened; for instance if some of the people suddenly got ill right before the match and dodged the match. Those fans will use this case as an example and try to claim for a refund of their money.