Alabama Football, Inc. v. Stabler

319 So. 2d 678 (1975)

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Alabama Football, Inc. v. Stabler

Alabama Supreme Court
319 So. 2d 678 (1975)

Facts

Ken M. Stabler (plaintiff) was a quarterback for the Oakland Raiders (Oakland) of the National Football League (NFL). In April 1974, Stabler signed a contract with Alabama Football, Inc. (Alabama) (defendant), a member of the World Football League (WFL), an upstart NFL competitor, for Stabler to play for Alabama for seven years after the expiration of his Oakland contract. The Alabama contract called for Stabler to be paid $50,000 upon signing, another $50,000 during 1974, and an additional $775,000 through 1980. In addition, the contract prohibited Stabler from playing professional football in any other league. Alabama used Stabler’s signing to promote ticket sales and to entice other players to sign with it. Indeed, Stabler appeared at promotional press conferences for Alabama and the WFL. Alabama paid Stabler his initial $50,000 but did not pay the additional $50,000 for 1974. Instead, Alabama paid Stabler $10,000 in May and, after telling Stabler that it did not have enough money to pay the remaining $40,000 it owed him for 1974, entered into a payment agreement with him. Alabama made its first $10,000 payment under that agreement, but when it could not pay the remaining $30,000, it gave Stabler a note for that amount. However, Alabama did not pay the note when it came due in November. Stabler sued Alabama, seeking, among other things, to rescind the contract due to Alabama’s breach. As of the trial-court hearing on Stabler’s request, Alabama had more than $1.6 million in debt, and its bank account was overdrawn by approximately $67,000. Alabama opposed rescission on the grounds that (1) Stabler did not return the $60,000 Alabama already had paid him, (2) Stabler did not give Alabama formal notice of his intent to rescind, and (3) its breach was too insubstantial to warrant rescission. The trial court granted Stabler’s request for rescission; it also canceled Alabama’s past-due $30,000 note. Alabama appealed the court’s ruling with respect to rescission.

Rule of Law

Issue

Holding and Reasoning (Shores, J.)

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