A contract is a binding agreement, which creates an obligation between parties. In Baton Rouge, parties enter into contracts for many different reasons. Parties to contracts, however, do not always hold up their end of the bargain. As a result, disputes arise.

Bellator Fighting Championships recently filed a lawsuit against lightweight champion Eddie Alvarez for breach of contract. Bellator’s complaint alleges that Alvarez violated the terms of his contract with Bellator when he refused to enter into a new contract with the company. Alvarez’s initial contract with Bellator included a 14-day matching period provision, which would allow Bellator to match any offer made by a rival promotion.

Ultimate Fighting Championships (UFC) extended an offer to Alvarez, which included a cut of profits and win-bonus pay. The offer also included one fight on Fox Network Television. Bellator believes it matched UFC’s offer, as its offer included nearly the same provisions. However, instead of offering one fight on Fox Network Television, Bellator offered one fight on Spike TV. This provision has been the source of contention, as Alvarez’s counsel maintains that because of this difference, Bellator’s offer was not a “matching offer.” On Jan. 4, Alvarez filed a claim seeking a declaratory ruling. Both parties are seeking injunctive relief.

A party’s failure to act in accordance with the terms of a contract is a breach. Violation of the terms of a contract can result in substantial financial injury to the breaching party. Here, if the court finds that Bellator’s offer was a matching offer, Alvarez will be in breach of his contract, and he will be prevented from signing UFC’s offer. Conversely, if the court finds that Bellator’s offer was not a matching offer, Bellator cannot stop Alvarez from entering into a contract with UFC.

Source: Sports Illustrated, “Eddie Alvarez, Bellator sue each other over contract dispute,” Loretta Hunt, Jan. 10, 2013