Michael Jackson Estate Sued for $10 Million in Breach of Contract Action

OLYMPUS DIGITAL CAMERAAlthough Michael Jackson died in 2009, new lawsuits against the deceased international pop star’s estate continue to come forward in light of Jackson’s continued strong record sales. In October one of Jackson’s most famous producers, Quincy Jones, sued Jackson’s estate and Sony Music for $10 million alleging a breach of contract and breach of the covenant of good faith and fair dealing.

The lawsuit arose from the use of Jackson’s work after his death. Jackson’s estate allegedly entered into contracts to allow several republications of works that Jones had originally produced. The works were authorized for Cirque du Soleil productions and several soundtracks and albums.

Jones alleges that his contract with Jackson’s production company, now MJJ, in 1978 and 1985 provided him with the right to be the first to remix or re-edit the recordings and also required that any use of the master recordings required his consent and a certain percentage of the royalties from the remixes.

Jones’ lawsuit states that he was denied his right to remix or re-edit the recordings, and also denied additional compensation when MJJ entered into an agreement with Sony to share profits of the master recordings and divert revenues as profits instead of royalties to deny Quincy payment. The lawsuit alleges that this attempt to avoid paying Quincy proper royalties violated the covenant of good faith and fair dealing.

Breach of Contract and the Covenant of Good Faith and Fair Dealing

Generally a contract requires just 3 elements: an offer, acceptance, and consideration. Once all three of these are in place a contract may be binding, even if the contract is not written. However, contractual terms are often much more complex than the contract formed, especially when a party attempts to sneak around the terms of the contract to avoid having to fully pay the other party. In these instances the implied covenant of good faith and fair dealing comes in to play to protect the parties.

The covenant of good faith and fair dealing means that a party cannot attempt to deprive the other party of the benefits of a contract. It is similar to a breach of contract in that it arises from the contract, and involves a partial or substantial failure to perform. However, it is a particular type of contractual breach because in a straightforward breach of contract case one party will usually outright refuse to perform a duty. The use of more subtle clandestine agreements, pretext, and ulterior motives are much more common in violations of the covenant of good faith and fair dealing.

If Quincy’s lawsuit against Jackson is successful, a majority of the damages will likely be based on the violation of the covenant of good faith and fair dealing.

Although Quincy’s $10 million in damages might be hard to believe, this figure is likely a sound estimate based on the income of MJJ’s deals over the past several years. In 2012 alone Michael Jackson’s recordings earned $160 million, and with more albums on the horizons it looks like the king of pop’s estate will continue earning many millions each year.

Orange County Breach of Contract Attorney

If you have are involved in a breach of contract dispute contact an experienced business litigator. Call the Law Offices of Tony T. Liu by calling (714) 415-2007.