Nike Sues Adidas over Soccer Player- Zheng’s Contract Essay Example

actually the contract was performed quite well from July,2003 to Aug. 2004, Zheng strictly followed Nike’s requirement- wearing Nike products as much as possible on public occasions, Nike also paid Zheng on time. With Zheng’s growing in the sports market, at least Zheng started feeling the consideration was not so adequate, so Zheng asked more pay from Nike on Aug. , 2004, but was refused.

Furthermore, Zheng’s lawyer said Nike already stopped pay from the 2nd half year of 2004, if one party refused to act, the other party has the right to withhold performance.Since Nike breached the contract first, so Zheng revoked the acceptance and terminated the contract unilaterally with Nike. And also, Zheng wore the company’s shoes during China national games because Adidas sponsored the team. But Nike’s lawyer responsed, actually there is a payment on the “to be paid” status, they requested but did not get Zheng’s new account No. due to Zheng being transferred from ShenZhen to Shan Dong club, they have evidence to convince Nike did not violate the contract. The result now is that Zheng did not receive the pay and Nike did not successfully pay out, but we have to wait for a verdict from the court if two parties exercised good faith in the contract performance and which party breached contract first. Another part of the lawsuit is Nike accused Adidas AG and Zheng of harming its interests, Nike’s lawyer said Adidas contacted Zheng immorally though they know Zheng was sponsored by Nike, Zheng was lured by Adidas good pay. Nike insisted 34 evidences they submitted to the court can fully support this point.

But Adidas lawyer said, Adidas

China was just formed in Aug. 11 of 2005, the activities what Zheng participated before this date were impossibly organized by them, so how can they become defendant also? For the Adidas Suzhou activity which Zheng participated in, the lawyer said Zheng was assigned by China football team, not lured by Adidas. Actually in May, 2006, Nike already sued Adidas but withdrawed due to no sufficient evidence in Beijing. That is why Adidas strongly requested evidence from Nike again. So the focus is still related with if the terminate notice in Mar. 8 from Zheng was valid or not.

I have no chance to witness the evidence which Nike submitted and the terms and conditions of their contract, but excluding the purpose Nike may want to promote their brand in the market via this lawsuit, how can the contract support both sides continuous mutual assent, impose obligation, guarantee the performance farthest and avoid this kind of lawsuit? I would like to supplement some points here which I learned from the course:

1. Obligation of good faith, the contract can impose an obligation of good faith in its performance or enforcement.From the case, if Zheng really refused to provided new account to Nike, we can doubt if he acted good faith;
2. Notification of Amendment of acceptance for each side, the notice must be given within a reasonable time. From the case, I felt both sides hope the opposite party breached the contract first, it seems there is no provision to enforce how to solve the discrepancy, it makes sense to give them a channel;
3. Definition of breach. A breach is the failure to act or perform in the
   

manner called for by the contract. From this case, the definition of breach is not clear;

Overall, the contract

is very important for our business, if we know the basic elements of contract, know the legal obligations and rights, we can avoid lots of unnecessary lawsuits and focus on the business, I hope the court can make a verdict soon and make both parties and rest of the world learn lessons from it.