An ad contract is binding on you as well as your out of home client.  That’s the lesson of National Advertising vs Wilson Auto Parts.  Here are the facts.

• In April 1985 Wilson Auto Parts (“Wilson”) signed a 3 year contract to advertise on a 12′ by 36′ billboard owned by National Advertising  (“National”) at a rent of $375/month.
• Eighteen months before the contract expired National replaced the 12′ by 36′ billboard with a 14′ by 48′ billboard and took down Wilson’s ad.  After replacing the billboard National told Wilson they could remain only at an increased price.  Wilson insisted that National honor the original contract.  National replaced Wilson’s ad with an ad from Cellular One at a rent of $1,590/month.
• Wilson sued for breach of contract and punitive damages.  In 1991 Indiana courts found National guilty of willful beach of contract and awarded Wilson compensatory damages of $21,870 (the difference between the $1590/month amount at which the sign was re-rented less the $375/month amount of Wilson’s contract times the 18 months remaining on the ad contract).
• The Indiana courts denied Wilson’s additional request for punitive damages: “Punitive damages are generally not recoverable in breach of contract actions absent clear and convincing evidence that the breaching party’s conduct was accompanies by malice, fraud, gross negligence or oppressive conduct…National’s removal of the sign was the result, in part at lease, of internal miscommunications between National’s employees..There was no clear and convincing evidence that Nationals conduct was accompanies by malice, fraud, gross negligence or oppressive conduct.”

Billboard Insider’s take:  Ad contracts are binding on you as well as your out of home client.  Get the clients approval before you change the contract

To receive a free morning newsletter with each day’s Billboard insider articles email info@billboardinsider.com with the word “Subscribe” in the title.  Our newsletter is free and we don’t sell our subscriber list.

Paid Advertising