Denver and Delilah Film, DDF, is owned and operated by Theron. DDF is “both a film production company and a so-called ‘loanout’ corporation. A loan-out corporation enters into agreements whereby Theron renders services of various kinds to third-parties” (Weil v Theron, 2008). In May 2005, Raymond Weil made an agreement with DDF. Raymond Weil agreed to pay “DDF three million dollars in exchange for the use of Theron's image in a world-wide print media advertising campaign for Raymond Weil's ‘Shine’ watch collection” (Weil v Theron, 2008). The agreement contained a breach of contract clause, which stated, “no party shall have the right to terminate this Agreement or sue for breach of this Agreement until it gives written notice of the alleged breach to the other party and a period of five (5) business days” (Weil v Theron, 2008).
Alleged Breach Raymond Weil sites a few instances where Theron breached the contract. The first incident happened in April 2006, when Montblanc “displayed a posted of Theron with the Montblanc necklace draped over her forearm” (Weil v Theron, 2008). Raymond Weil sent written notification to Theron and DDF stating the Montblac poster was in breach of contract. Theron had the poster removed within five business days, which was in accordance with the agreement. The next incident happened in March 2006, when Theron participated in a film festival panel discussion and was photographed wearing a Christian Dior watch. The photograph with the caption “Charlize wears Dior” was published in an in-store annual, and circulated to thousands of customers and retailers (Weil v Theron, 2008). Other alleged breaches occurred in April 2006 when Theron entered into a contract with Chopard to wear Chopard jewelry to the BAFTA and Academy Awards. Also in April 2006, Theron was loaned Cartier jewelry to wear to the Golden Globes; she was not paid or under contract with Cartier, but she profited by receiving expensive pieces of jewelry as “tokens of appreciation” (Weil v Theron, 2008).
Defendants sued for breach of contract have several defensive strategies available. A Defendant may declare no breach was committed because a contract was never formed due to “lack of an offer, an acceptance, consideration, mutuality of obligation, or writing” (US Legal Inc., 2010). Defendants might also declare lack of capacity to enter a contract, stating the contract is void based on the “grounds that the defendant was incompetent, insane or intoxicated at the time it was entered” (US Legal Inc., 2010). “The law also affords defendants several other defenses in breach of contract actions. They include: (1) unconscionability; (2) mistake; (3) fraud; (4) undue influence; and (5) duress” (US Legal Inc., 2010). Theron’s first defensive action was to dismiss herself as a named party defendant in the lawsuit, arguing “that the only contracting party was DDF,” and that she signed the agreement in the sole capacity “as an agent of DDF, not in her own right” (Weil v Theron, 2008). The other defense available to Theron was the fact that within the agreement, the clause permitting the “breaching party to cure within…