Fashion Law: NOT FIERCE! Christian Siriano Sued Over Payless Shoe Deal – The Scoop on Oral Contracts

“Christian Siriano has gone from Project Runway winner to Payless to a new lawsuit from his talent agency that demands he pay up.

Siriano, who is most remembered for his “fierce” catch-phrase on Project Runway, signed a deal in 2008 with Payless to create footwear for the company’s 4,500 retail stores. The partnership has garnered some attention in the fashion industry as the discount footwear retailer looks to become the next Target by collaborating with notable designers.

Designer’s Management Agency says it was responsible for securing the deal and that it “substantially negotiated” the licensing agreement.

According to a lawsuit filed against Siriano last week, DMA orally promised to pay a 20 percent commission. According to court documents, Siriano got a $35,000 design fee and also gets a royalty rate of 2.5% of sold products. He’s also guaranteed at least $50,000 for each of the Fall and Spring collections and $30,000 for each of the Summer and Holiday collections. . .”

The Legal Talk/Analysis

Industry: Fashion

Area of Law at Issue: Contract Law

Legal Issue in Dispute: Breach of Oral Contract

Are Oral Contracts Enforceable? Yes.

First, DMA Agency has to show that there was indeed an oral contract.

How Does DMA Prove an Oral Contract Existed?
Folks get in the habit of putting oral agreements in writing. You shoot yourself in the foot when you show up to court, file your suit and then say, “XYZ promised ABC” but you have no proof evidencing the oral promise. It turns into a “he said,” “she said” war, which most likely would tilt towards the defendant. So, get it in writing.

Many creative artists and business entrepreneurs do not get these oral agreements  in writing because they do not want to feel like they are making  a fuss. Also, there is always someone that says, “Oh! That’s funny, you are the first that has ever asked.” Get over being the first to ask for what should be standard protocol and “just do it!” You save relationships, money and headaches down the line.

Let’s get back to the lawsuit against Christian Siriano. We have an oral contract. How does DMAprove the existence of an oral contract between DMA and Siriano?

  1. Witnesses: When you have an oral contract with a business or fellow creatives, get a third party to witness the oral contract. These witnesses can then be subpoenaed, through your attorney, in a lawsuit to testify on your behalf. Obviously the jury or judge depending on if it is a jury or bench trial, will determine the credibility of your witnesses. A witness testimony is a powerful thing to have.
  2. Written Emails/Notes: If DMA has written correspondences evidencing discussions of their oral agreement with Siriano, that would obviously boost their case. As a standard practice, get into the habit of following up immediately in writing with an outline of what you believe you have both agreed to in an oral contract. Be sure to so state, “if the above is contrary to your understanding of our agreement, please let me know ASAP. I look forward to working with you.” If the other side never negates the outline of what you said you both agreed to, it makes it hard for that third party to say you never got into an agreement.
  3. Conduct: Make sure your conduct is consistent with what you said you would do. In Siriano’s case, he will have a little bit of a hurdle in these regards, based on reported facts. If indeed he had been giving his agency large sums of money towards agreed payment per the oral contract, then he could have a hard time proving the lack of existence of an oral contract.
What Does Siriano need to prove to show the lack of an oral contract? If you are in Siriano’s shoes, you also want:
  1. Your witnesses
  2. Your writings refuting demands for payments on alleged oral agreements
  3. The lack of a written contract
  4. The lack of conduct evidencing such oral contract
Assuming it can be shown there was an oral contract, the next analysis is, was there a breach of that oral contract? Further, if there was a breach, was the breach excusable? For these subsequent steps, click the Mos Def case to get the scoop.  
NOTE: Clearly, there is a lot more to this case but I am focused on the reported facts, so far.

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