“I’m inclined to cancel my ooh ad contract” is not the same as “I’ve cancelled.” That’s the lesson of OUTFRONT Media vs Hart. Here are the facts.
- In May 2016 the Georgia law firm Hart and Associates signed an agreement for advertising on multiple billboards (“Agreement”) for 12 four week periods. Hart added a provision stating that the Agreement could be terminated after the sixth advertising period with 30 days notice. Prior to execution of the Agreement an OUTFRONT representative told a Hart employee that billboard advertising would generate increased call volumes.
- Hart paid for 2 advertising periods, then stopped paying. In a December 2016 meeting to discuss the past due invoices, Hart’s CEO indicated that “we were inclined to cancel the Agreement.”
- OUTFRONT filed a summary judgement for payment after receiving no payment for 10 of the 12 four week periods. Hart contested the judgement, alleging that Hart had effectively exercised its right to cancel; OUTFRONT had breached the terms of the Agreement by posting the initial ads late; OUTFRONT had fraudulently induced Hart to enter the Agreement by falsely claiming that the billboards would cause Hart’s call volume to rise.
- In 2019, Arizona Superior Court and the Arizona Court of Appeals ruled in favor of OUTFRONT. The courts reasoned as follows: (1) Wanting to cancel an agreement is not cancelling an agreement. “It can hardly be said that “inclined to cancel” amounts to a clear effort to cancel the agreement.” (2) The contract provided that a delay in posting was not a breach. “The Agreement states that if [OUTFRONT] fails to timely meet its posting requirements [under the Agreement], any resulting loss of advertising shall not be deemed a breach or termination of this Contract.” Hart’s remedies for any delay were to receive an extension to the advertising period.” (3) Claims that the billboard advertising would lead to increased call volume were puffery but not fraud.
Billboard Insider’s take: This case illustrates the importance of clear contract termination language. If the Agreement had said that the agreement could only be terminated in writing, maybe the court dispute could have been avoided. The case also illustrates why your ad contract needs to say that any delay in posting an ad will be made up by days added to the end of the contract. That language protected OUTFRONT.
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