Financial fallout from Schiano, UT could owe buyout

#126
#126
HwyChile said:
I am a lawyer and a MOU is not a binding contract. In fact, if drafted correctly, a MOU specifically states it is not a binding contract. The purpose of a MOU is to get some of the basic deal points on a piece of paper so that a real contract can be drafted using the MOU or LOI as a guide. You have to sign a real contract to be bound. If a MOU were binding, there would be no need to draft a real contract. You would just sign the MOU and be done. That is why they are not binding. I don't know what kind of law you practice but it is puzzling that you would say a MOU is a binding contract.
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This all day. Specifically, since the AD can not enter into the contract without getting it approved by the Board, the MOU would have language to that effect, such as “in the event that the parties’ governing boards decide to
enter a joint use agreement.”
 
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#127
#127
If a MOU were a binding contract, what incentive would a coach have to ever sign the full contract which would have a lot more detail that could be negative to the coach? A coach could just refuse to sign the full contract and just say I have a binding MOU and do not want to commit to anything else in your comprehensive contract. A MOU just has basic terms like salary, bonuses, etc. that is used as a guide to draft a real contract so the drafter knows the deal points to put in the contract. It would be legal malpractice to make a MOU binding.
 
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#128
#128
It really is dependent on the language of the mou. I made an assumption that there was an intent to bind schiano and the Vols to the basic terms, money, term, buyout, etc. so he could begin recruiting. The smaller details, housing, insurance, etc are left open.

If that's the case, then it's binding. We don't know enough, and I don't want to hijack this thread.

I'm just in shock over the incompetence coming from the front office. It's shocking
 
#129
#129
Coach Mac Attack said:
It really is dependent on the language of the mou. I made an assumption that there was an intent to bind schiano and the Vols to the basic terms, money, term, buyout, etc. so he could begin recruiting. The smaller details, housing, insurance, etc are left open.

If that's the case, then it's binding. We don't know enough, and I don't want to hijack this thread.

I'm just in shock over the incompetence coming from the front office. It's shocking
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In my 18 years of practice I have never seen a binding MOU or LOI, and I do nothing but transaction work where we use MOU or LOIs. I suppose someone who does not know what they are doing could make one binding, but I would consider that malpractice. Sometimes certain provisions like
"confidentiality", "no shop clauses", etc. are binding, but not the deal itself.
 
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#130
#130
It doesn't matter what the document was called, it matters what the document says. Relying on the definition of "Memorandum of Understanding" tells you nothing, because that describes a type of document normally called that. But if the "memorandum" itself contains the essential elements of a contract, is signed by both parties, and doesn't contain any language claiming or indicating that it's non-binding, then it's likely to be enforceable as a contract regardless of what the title of it is. It all comes down to how it's drafted. If Schiano's attorney/agent drafted it, it was probably written to be enforceable, because in Schiano's situation he would want to lock the school in. But without seeing the actual language, there's no way to know. General descriptions of how the law views a Memorandum of Understanding are irrelevant, because they presume the document isn't a contract by its wording.

And yes, I'm an attorney.
 
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#131
#131
TN_Transplant said:
This all day. Specifically, since the AD can not enter into the contract without getting it approved by the Board, the MOU would have language to that effect, such as “in the event that the parties’ governing boards decide to
enter a joint use agreement.”
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The condition precedent for authority to enter is a good point.
 
#132
#132
Florida has very open public records law. If Tn has the same you could probably get your hands on a copy. Maybe even Currie's emails? Could be good reading.
 
#133
#133
Coach Mac Attack said:
The condition precedent for authority to enter is a good point.
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Yes, since this is a position that require board approval, there is no way that they don't have language to that affect in the MOU.

Now, might they have some financial responsibility around good faith negotiation, attorneys fees, etc? Of course. I'm not saying we don't pay him something, and maybe something substantial, but less than a million.
 
#134
#134
AirGator said:
It doesn't matter what the document was called, it matters what the document says. Relying on the definition of "Memorandum of Understanding" tells you nothing, because that describes a type of document normally called that. But if the "memorandum" itself contains the essential elements of a contract, is signed by both parties, and doesn't contain any language claiming or indicating that it's non-binding, then it's likely to be enforceable as a contract regardless of what the title of it is. It all comes down to how it's drafted. If Schiano's attorney/agent drafted it, it was probably written to be enforceable, because in Schiano's situation he would want to lock the school in. But without seeing the actual language, there's no way to know. General descriptions of how the law views a Memorandum of Understanding are irrelevant, because they presume the document isn't a contract by its wording.

And yes, I'm an attorney.
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The problem with what you wrote is no lawyer would ever put all of that in a MOU. What you are really saying is that if they entered into a comprehensive contract it is binding, and yes that is true, but all reports are that they did not. Nobody with any competence would label a document MOU and then put binding language in it and then later draft a comprehensive contract. It just would not make sense. Again, a properly drafted MOU or LOI has language that states "THIS IS A NON-BINDING DOCUMENT THAT IS NOT A CONTRACT AND NO CONTRACT WILL OCCUR UNTIL THE PARTIES ENTER INTO A CONTRACT".
 
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#135
#135
I would be surprised when they called to 'break it off' with Sciano they said a number like 1 million to walk away. It was a quick breakup.
 
#136
#136
HwyChile said:
The problem with what you wrote is no lawyer would ever put all of that in a MOU. What you are really saying is that if they entered into a comprehensive contract it is binding, and yes that is true, but all reports are that they did not. Nobody with any competence would label a document MOU and then put binding language in it and then later draft a comprehensive contract. It just would not make sense.
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One of my favorite lines in a movie is from Snatch. "Never underestimate the predictability of stupidity"-Bullet Tooth Toney.

Based on recent performance, it's possible.
 
#137
#137
I think it would be fair to give him his attorney fees for negotiating the MOU, etc. even if the MOU did not provide such reimbursement. UT should do that as a gesture of good will.
 
#138
#138
HwyChile said:
I think it would be fair to give him his attorney fees for negotiating the MOU, etc. even if the MOU did not provide such reimbursement. UT should do that as a gesture of good will.
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If OSU fires him for lack of loyalty or something, his lost salary from OSU should be in play.
 
#139
#139
Coach Mac Attack said:
One of my favorite lines in a movie is from Snatch. "Never underestimate the predictability of stupidity"-Bullet Tooth Toney.

Based on recent performance, it's possible.
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I don't disagree it is possible, but I think it is unlikely since this is not UT's first rodeo and UT does have legal resources. If this were someone off the street, all bets are off.
 
#141
#141
#142
#142
HwyChile said:
The problem with what you wrote is no lawyer would ever put all of that in a MOU. What you are really saying is that if they entered into a comprehensive contract it is binding, and yes that is true, but all reports are that they did not. Nobody with any competence would label a document MOU and then put binding language in it and then later draft a comprehensive contract. It just would not make sense.
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I have seen it happen with LOIs more than once. And I'm not sure what you mean by "comprehensive." There is no requirement that an agreement be "comprehensive" in order to be binding. It merely requires that it address essential elements. Those could be relatively minimal. They would all likely be referenced in a MOU. Just because the final contract document would likely address many more issues doesn't mean that an agreement that covers fewer terms isn't binding. Again, it all comes down to how it's worded.

Now, I'm sure the MOU contained language that referenced approval by the Board of Trustees or whatever. The problem is, or could be, that the deal was never presented to the Board for a vote. I could easily see that being considered a breach. But this still all comes down to the wording. If there's one thing I've learned in twenty years of practicing law, you can't EVER assume a document contains language you would expect. If it can be left out or sloppily drafted in a $35,000,000.00 real estate LOI, as I've seen (and had enforced), it can be left out of a $20,000,000.00 coaching contract (or whatever the dollar amount was).
 
#143
#143
AirGator said:
It doesn't matter what the document was called, it matters what the document says. Relying on the definition of "Memorandum of Understanding" tells you nothing, because that describes a type of document normally called that. But if the "memorandum" itself contains the essential elements of a contract, is signed by both parties, and doesn't contain any language claiming or indicating that it's non-binding, then it's likely to be enforceable as a contract regardless of what the title of it is. It all comes down to how it's drafted. If Schiano's attorney/agent drafted it, it was probably written to be enforceable, because in Schiano's situation he would want to lock the school in. But without seeing the actual language, there's no way to know. General descriptions of how the law views a Memorandum of Understanding are irrelevant, because they presume the document isn't a contract by its wording.

And yes, I'm an attorney.
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I'm with this guy. This is 1L Contracts stuff, guys.

I did a WestLaw search for "Memorandum of Understanding." I didn't spend long on it, but guess how many Tennessee cases I found that held that a Memorandum of Understanding is not a contract? Zero. Guess how many cases I found where the Court of Appeals interpreted a Memorandum of Understanding just like it was any other contract? A bunch.

For reference, Butch's MOU said "When full executed, this MOU shall constitute a binding and legally enforceable agreement until superceded by a definitive written Employment Agreement between Coach and the University."

So, did Schiano's have the same language? Probably. Was it fully executed? Dunno. If I had to wager, I'd bet Currie brought the copy with all the UT signatures with him to Columbus.
 
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#144
#144
HwyChile said:
I am a lawyer and a MOU is not a binding contract. In fact, if drafted correctly, a MOU specifically states it is not a binding contract. The purpose of a MOU is to get some of the basic deal points on a piece of paper so that a real contract can be drafted using the MOU or LOI as a guide. You have to sign a real contract to be bound. If a MOU were binding, there would be no need to draft a real contract. You would just sign the MOU and be done. That is why they are not binding. I don't know what kind of law you practice but it is puzzling that you would say a MOU is a binding contract.
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Wrong. On almost every point.

Greg Schiano, Tennessee'''s memorandum of understanding, explained | SI.com
 
#145
#145
Frivolous said:
I'm with this guy. This is 1L Contracts stuff, guys.

I did a WestLaw search for "Memorandum of Understanding." I didn't spend long on it, but guess how many Tennessee cases I found that held that a Memorandum of Understanding is not a contract? Zero. Guess how many cases I found where the Court of Appeals interpreted a Memorandum of Understanding just like it was any other contract? A bunch.

For reference, Butch's MOU said "When full executed, this MOU shall constitute a binding and legally enforceable agreement until superceded by a definitive written Employment Agreement between Coach and the University."

So, did Schiano's have the same language? Probably. Was it fully executed? Dunno. If I had to wager, I'd bet Currie brought the copy with all the UT signatures with him to Columbus.
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MOU is just a meaningless title. You can call it a golf membership. If the language shows an intent to bind schiano and UT, it is binding.
 
#146
#146
Rooster1 said:
I would have thought law school had taught you better.

Greg Schiano, Tennessee'''s memorandum of understanding, explained | SI.com
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From the article:

"Further, the university’s board of trustees or the statewide university system board typically must vote to approve a hiring."

Language is put in all University documents for coaches about this. There will be some monetary cost established in case that approval does not come, but it will be nowhere near $20 million.

It is usually in the form of legal fees and some penalty, but I would be surprised if that totaled $1 million.
 
#147
#147
HwyChile said:
I think it would be fair to give him his attorney fees for negotiating the MOU, etc. even if the MOU did not provide such reimbursement. UT should do that as a gesture of good will.
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No way you are an attorney.
 
#148
#148
TN_Transplant said:
From the article:

"Further, the university’s board of trustees or the statewide university system board typically must vote to approve a hiring."

Language is put in all University documents for coaches about this. There will be some monetary cost established in case that approval does not come, but it will be nowhere near $20 million.

It is usually in the form of legal fees and some penalty, but I would be surprised if that totaled $1 million.
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It totaled $1 million for Barnes' MOU, for every year of the deal.
 
#149
#149
Frivolous said:
I'm with this guy. This is 1L Contracts stuff, guys.

I did a WestLaw search for "Memorandum of Understanding." I didn't spend long on it, but guess how many Tennessee cases I found that held that a Memorandum of Understanding is not a contract? Zero. Guess how many cases I found where the Court of Appeals interpreted a Memorandum of Understanding just like it was any other contract? A bunch.

For reference, Butch's MOU said "When full executed, this MOU shall constitute a binding and legally enforceable agreement until superceded by a definitive written Employment Agreement between Coach and the University."

So, did Schiano's have the same language? Probably. Was it fully executed? Dunno. If I had to wager, I'd bet Currie brought the copy with all the UT signatures with him to Columbus.
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If a MOU has language stating it is a contract and it meets the terms of a contract, then it is a contract. I have never seen one that met those requirements but I am in TX. Maybe TN folks do things differently. If so, they may want to rethink what a MOU is and why it is important not to make it binding.
 
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