Lawsuit against NASCAR reveals details of $6.2M sponsor contract
Automotive companies obviously will pay a lot of money to put the NASCAR logo on their products.
In the case of Advanced Fluids Solutions, which wanted to market its new EXP4 fuel and oil performance additive through the “NASCAR Performance” program, it had agreed to pay $6.295 million over seven years, according to the contract that is now part of a lawsuit between Advanced Fluids and NASCAR. The lawsuit was originally filed last month in Volusia County (Fla.) Circuit Court, and NASCAR had the case moved Friday to United States District Court in Orlando.
The program was scheduled to start in 2010 but never began because Advanced Fluids, according to its lawsuit complaint, had not paid its original $500,000 payment due at the execution of the contract in October 2009, and NASCAR terminated the deal in December 2009.
Advanced Fluids alleges in its complaint that NASCAR illegally terminated the agreement because NASCAR did not give proper written notice that Advanced Fluids was in default and continued to talk to the company during the time it was trying to get the funding finalized. The company is asking for its sponsorship with NASCAR to be reinstated.
NASCAR denies the claims and has filed a motion to dismiss the case.
“AFS (Advanced Fluids Solutions) never performed … any terms of the contract,” NASCAR states in its response to the lawsuit. “NASCAR is thus relieved of any obligation under the contract. As a result, AFS is precluded from the equitable remedy of specific performance.
“AFS contends that NASCAR – through its conduct – waived its right to enforce the payment terms of the contract. AFS is wrong. Pursuant to the contract, NASCAR’s conduct cannot waive its contractual rights.”
The contract was a lucrative one as Advanced Fluids sought to join more than 35 automotive companies that have deals with NASCAR to use NASCAR logos on their products.
According to the contract, filed as an exhibit to the lawsuit, Advanced Fluids would pay $500,000 when the deal was signed for the remainder of 2009, then $750,000 in 2010, $785,000 in 2011, $800,000 in 2012, $830,000 in 2013, $850,000 in 2014, $880,000 in 2015 and $900,000 in 2016. The last four years (2013-2016) were part of an option, with either side able to opt out by giving notice by Dec. 31, 2011. Scene Daily